text:
(a) The department shall grant funds to one or more fund managers to implement the program until June 30, 2026, which shall include funds for all of the following:

(1) Capitalized operating subsidy reserves.

(2) Loans or grants awarded pursuant to this chapter.

(3) Administrative costs authorized pursuant to paragraph (3) of subdivision (b) of Section 50720.2.

(b) A contract between the department and a fund manager to carry out the provisions of this chapter may be amended past June 30, 2026, if funds are available and if deemed appropriate by the department.

(c) The fund manager or managers shall, in compliance with the guidelines adopted pursuant to this chapter, be responsible for all of the following:

(1) Reviewing and approving loan or grant applications.

(2) Originating and servicing loans or grants, including capitalized operating subsidy reserves.

(3) Establishing terms and conditions for loan or grant applications pursuant to the guidelines adopted pursuant to this chapter.

(4) Ensuring compliance with loan or grant terms and conditions.

(d) The fund manager or managers shall meet all of the following criteria:

(1) Be a nonprofit lender with experience making real estate loans in this state, or be a housing trust fund operated by a city, a county, a city and county, or a joint powers authority as described in Article I (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code operated for the purpose of funding the development, acquisition, rehabilitation, or preservation of affordable housing for low- or moderate-income residents.

(2) Have originated and serviced loans to develop, maintain, improve, or acquire affordable housing, including at least five million dollars ($5,000,000) in acquisition loans.

(3) Demonstrate an ability to process loans for property acquisitions in an expedient manner sufficient to deploy loans necessary to purchase real property in trustee’s sales pursuant to the time constraints described in Section 2924m of the Civil Code.

(e) The department may, but is not required to, contract with one or more third-party consultants to assist with administering the program.

(1) Any third-party consultant contracted with by the department pursuant to this subdivision must demonstrate expertise in a variety of property ownership and stewardship models, such as rental housing, home ownership, community land trusts, limited-equity housing cooperatives, workforce housing cooperative trusts, or nonprofit affordable housing cooperatives.

(2) In contracting with a third-party consultant pursuant to this subdivision the department shall prioritize to third-party consultants that demonstrate a commitment to and experience in advancing racial equity.

history: (History: Amended by Stats. 2022, Ch. 70, Sec. 22. (SB 197) Effective June 30, 2022.)


kind: section

code: HSC

text:
(a) A borrower or grantee that receives funds from a loan or grant made pursuant to the program shall only use the funds as follows:

(1) To pay for property acquisition, rehabilitation, and repair costs and associated transaction costs for real property purchased through one of the following:

(A) A trustee’s sale pursuant to Section 2924m of the Civil Code.

(B) A preforeclosure intervention sale.

(C) A foreclosure risk intervention sale.

(2) To pay for transaction costs, so long as no more than 10 percent of a single loan or grant funded by the program is used toward transaction costs.

(3) To pay operating expenses from any capitalized operating subsidy reserve established pursuant to Section 50720.6.

(b) A borrower or grantee that receives funds from a loan or grant made pursuant to this program shall ensure that all vacant units are restricted in one of the following ways:

(1) By those conditions of a contract described in paragraph (10) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.

(2) By those conditions of a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.

(3) (A) To persons and families of extremely low, very low, low, or moderate income, with an affordable housing cost or an affordable rent, as defined in Sections 50052.5 and 50053, respectively, for a minimum of 55 years, or a longer duration as the department may require.

(B) A property may be restricted pursuant to this paragraph by recording a lease agreement, ground lease agreement, or other recorded contractual agreement between a borrower or grantee and the residents of the property, or between a borrower or grantee and a resident-controlled corporation or association.

(C) Any agreement made between a borrower or grantee and a resident-controlled corporation or association pursuant to subparagraph (B) shall ensure that the housing units are affordable to lower income households, as defined in Section 50079.5

(c) Occupied properties having a mix of incomes among tenants or owners may seek exemption from restrictions under subdivision (b) for units with over-income occupants, only until the unit is vacated due to natural turnover and available to be rerented or resold.

history: (History: Amended by Stats. 2022, Ch. 570, Sec. 10. (AB 157) Effective September 27, 2022.)

division: 31. HOUSING AND HOME FINANCE

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 8.6. Foreclosure Intervention Housing Preservation Program


text: A loan made pursuant to the program may be partially or fully converted to a grant.

history: (History: Added by Stats. 2021, Ch. 111, Sec. 23. (AB 140) Effective July 19, 2021.)

part: 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

chapter: 8.6. Foreclosure Intervention Housing Preservation Program


text:
(a) The department shall adopt guidelines for the administration of the program. The guidelines shall comply with all of the following:

(1) The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(2) The guidelines shall not be subject to the requirements of Chapter 8.3 (commencing with Section 50705) of Part 2 of Division 31.

(3) The guidelines shall ensure that loan interest rates on loans made pursuant to the program are no higher than those of other loan programs for affordable housing overseen by the department.

(4) The guidelines shall ensure that a loan made pursuant to the program can be obtained within the timeline necessary for an eligible bidder in a trustee’s sale pursuant to Section 2924m of the Civil Code to successfully acquire real property using a loan from the program.

(5) The guidelines shall ensure, to the extent possible, geographic equity in allocating funding across the state.

(b) The department may include in the guidelines reasonable procedures for a borrower to apply for all or a portion of its loan to be converted to a grant and to verify eligibility for such a conversion pursuant to this section.


text:
The following definitions shall apply to all activities conducted pursuant to this chapter. Except as otherwise provided in this article or unless the context otherwise requires, the definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 of this division shall also apply to this chapter.

(a) “Assisted unit” means a unit which is affordable to an eligible household as a result of a payment made by the department pursuant to Article 2 (commencing with Section 50745), 3 (commencing with Section 50755), 4 (commencing with Section 50765) or 6 (commencing with Section 50771.1), or as a result of establishment of, or assistance from, an annuity trust fund or both. The department shall adopt regulations which establish a method for computing rents for eligible households.

(b) “Below-market interest financing” means any of the following:

(1) A long-term loan made by the agency with below-market interest, as defined by Section 50056.

(2) A long-term loan made by a local finance entity at a below-market interest rate no higher than that established from time to time by the department, provided such rate shall not exceed by more than 1 12 percent the interest rate on long-term loans, if any, made by the agency for rental housing development proposals being submitted or processed for department assistance under this chapter at the same time.

(3) The use of subsidies, assistance, or financing, other than as provided in paragraphs (1) and (2), which reduce rent levels by an amount equivalent to that enabled by long-term loans at the interest rate established for purposes of paragraph (2).

(4) Subsidies, assistance, or financing provided to the sponsor by or through the agency or local finance entity and which is a loan made at below-market interest by an agency of the federal government.

(c) “Development costs” means the aggregate of all costs incurred in connection with construction of a rental housing development pursuant to this chapter, including (1) the cost of land acquisition, whether by purchase or lease, (2) the cost of construction, (3) the cost of overhead including architectural, legal, and accounting fees incurred in connection with the construction of the rental housing development, (4) the cost of related offsite improvements, such as sewers, utilities, and streets, and (5) the cost of necessary and related onsite improvements. The department shall adopt regulations consistent with this section specifying the expenses qualifying as development costs for which a payment may be made pursuant to Section 50745.

(d) “Eligible households” means lower income households, as defined by Section 50079.5, including very low income households, as defined by Section 50105.

(e) “Local finance entity” means a redevelopment agency, housing authority, duly constituted governing body of an Indian rancheria, city, county, or city and county, or any combination thereof, which, in connection with the program established pursuant to this chapter, provides or utilizes financing, at below-market interest or the equivalent under subdivision (b) of Section 50745, for development of rental housing developments eligible for assistance under this chapter.

(f) “Rental housing development” means a development of five or more rental or cooperative units, on one or more sites and includes a mobilehome park with five or more mobilehome spaces.

(g) “Sponsor” means any individual, joint venture, partnership, limited partnership, trust, corporation, cooperative, local public entity, duly constituted governing body of an Indian rancheria, or other legal entity, or any combination thereof, certified by the department and the agency or the department and a local finance entity as the case may be, to own and manage or construct a rental housing development assisted pursuant to this chapter. A sponsor may be organized for profit or limited profit or be nonprofit.

history: (History: Amended by Stats. 1989, Ch. 1346, Sec. 1.5. Effective October 2, 1989.)

chapter: 9. Rental Housing Construction Program

article: 1. Definitions and General Provisions

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 1. Definitions and General Provisions


text:
(a) Not less than 30 percent of the units in each rental housing development consisting of 10 or more units which receives any funds pursuant to this chapter shall be available on a priority basis to or occupied by eligible households pursuant to the agreement required by Section 50739, and not less than 20 percent of all the units in each rental housing development shall be available on a priority basis to, or occupied by, very low income households.

(b) Every sponsor shall, with respect to assisted units, conduct an affirmative marketing program, on a continuous basis, which program has been approved by the department or by the agency in cases where the agency provides financing. For the purposes of this subdivision, “affirmative marketing program” means any program approved by the department that is designed to achieve greater access to housing opportunities created by this chapter for eligible households. Such program shall include educational, promotional, and other appropriate activity designed to secure greater housing opportunities for those households. Where a significant number of persons in a community have limited fluency in the English language, publications implementing an affirmative marketing program in that community shall be provided in the native language of those persons.

(c) Of all assisted units, under this chapter, not less than two-thirds shall be allocated to very low income households and the balance for lower income households.

(d) Elderly or handicapped households shall be allocated not less than 20 percent, nor more than 30 percent, of the assisted units provided pursuant to this chapter. Other handicapped households shall be eligible for assisted units pursuant to this subdivision or subdivision (a), (b), (c), or (e) if they otherwise meet the requirements imposed by those provisions.

(e) Not less than 20 percent of the funds loaned pursuant to this chapter after November 1988 shall be allocated to rural areas.

For the purposes of this section “rural area” shall have the same meaning as defined in Section 50199.21.

history: (History: Amended by Stats. 1992, Ch. 496, Sec. 1. Effective January 1, 1993.)

article: 1. Definitions and General Provisions


text:
The department shall adopt rules and regulations, in accordance with the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, for the administration of this chapter. The rules and regulations shall give priority in the allocation of funds available for the purposes of this chapter to the following:

(a) Rental housing developments which are of the lowest possible cost, given local market conditions.

(b) Rental housing developments which incorporate innovative or energy-efficient design and construction techniques and higher densities that will result in lower costs while retaining quality.

(c) Rental housing developments which complement the implementation of a local housing program of increased housing supply for persons and families of low or moderate income.

(d) Rental housing developments for which the housing sponsor, whether public or private, has contributed or received funds, services, or land or for which Community Development Block Grant Funds have been allocated under Title I of Federal Public Law 93-383 for eligible expenditures, including, but not limited to, rent subsidies, site acquisition, development costs, or construction costs.

(e) Rental housing developments which utilize available funds in the most efficient manner to produce the maximum number of housing units.

(f) To the extent feasible and consistent with the other priorities contained in this section, rental housing developments which are located within existing public transit corridors as defined in Section 50093.5. However, this priority shall not apply to rental housing developments located in rural areas which are assisted pursuant to this chapter.

history: (History: Amended by Stats. 1980, Ch. 1154, Sec. 3.2.)

article: 1. Definitions and General Provisions


text: Funds available for the purposes of this chapter shall be allocated by the department throughout the state in accordance with identified housing needs.

history: (History: Added by Stats. 1979, Ch. 1043.)

article: 1. Definitions and General Provisions


text: The department may make payments pursuant to Article 2 (commencing with Section 50745), 3 (commencing with Section 50755), or 4 (commencing with Section 50765) or contract to make annuity fund payments, or both, only if such payments or trust fund assistance result in affordable rents in assisted units for eligible households. The payments may be provided as loans to be repaid and payments of principal or interest may be deferred or made payable over a period of time. The payments may also be provided to acquire rights of occupancy or leaseholds, or to write down the development costs of a rental housing development. In addition to making payments to provide assisted units for eligible households, the department may provide funds if necessary to ensure the economic feasibility of, and to enable the construction of, rental housing developments assisted under this chapter, but no more than 10 percent of the moneys appropriated to the Rental Housing Construction Fund may be used for this purpose.

history: (History: Amended by Stats. 1980, Ch. 1154.)

article: 1. Definitions and General Provisions


text:
(a) The department shall establish and administer an annuity fund and may, notwithstanding any other provision of this chapter, make commitments to provide annuity payments from the fund directly to sponsors of rental housing developments which will receive construction or mortgage financing, or both, from the Farmers Home Administration to ensure affordable rents to eligible households.

(b) The department shall require annual reports on the use of annuity funds and any audits necessary to ensure the proper use of moneys from the annuity fund. The department shall review all complaints received concerning those funds and shall have all powers necessary to assure the lawful application of those funds.

(c) Any rental housing development assisted pursuant to this section shall be governed by a regulatory agreement between the sponsor and the department. The regulatory agreement shall meet all of the requirements imposed by subdivisions (b), (c), (d), and (e) of Section 50757. The regulatory agreement shall also contain restrictions on the occupancy of the dwelling units within the rental housing development necessary to meet the requirements of subdivisions (a), (b), (c), and (e) of Section 50736 and Section 50739. In addition, elderly or physically handicapped households shall be allocated not less than 20 percent, or more than 50 percent, of the assisted units provided pursuant to this section. Other handicapped households shall be eligible for assisted units pursuant to this subdivision or subdivision (a), (b), (c), or (e) of Section 50736 if they otherwise meet the requirements imposed by those provisions.

(d) The department may utilize up to 2 12 percent of the moneys appropriated for purposes of this section for administrative costs incurred in administering this section.

(e) The department shall make requests for proposals available to all potential sponsors of rental housing developments to be financed by the Farmers Home Administration who request them. The department shall encourage nonprofit sponsors and public agency sponsors to submit proposals. The request for proposals shall provide information about the availability of annuity payments to ensure affordable rents in rental housing developments financed by the Farmers Home Administration, the department’s criteria for making commitments of its annuity funds, and the appropriate application procedure. The applicant shall be required by the department to concurrently submit a preapplication for financing to the Farmers Home Administration. The department shall submit to the Farmers Home Administration those applications for which the department has made commitments for annuity payments under this section. This section does not prohibit a sponsor of a rental housing development from applying directly to the Farmers Home Administration for financing and for federal rental assistance payments.

(f) “Rental housing development,” as used in this section, includes farm labor housing developments financed or insured by the Farmers Home Administration pursuant to Section 1484, 1485, or 1486 of Title 42 of the United States Code.

history: (History: Amended by Stats. 1985, Ch. 697, Sec. 1.)

article: 1. Definitions and General Provisions


text:
At the time the department makes a payment pursuant to Article 2 (commencing with Section 50745), 3 (commencing with Section 50755), or 4 (commencing with Section 50765) or contracts to make annuity fund payments in connection with a rental housing development, or both, a written agreement between the department and the agency, local finance entity, or local public entity shall be executed, designating the number of units within the rental housing development available to, or occupied by, very low income households, other lower income households, and other households. If the number of units occupied by very low income households or other lower income households in any housing development ever falls below the number agreed to by the department and agency, local finance entity, or local public entities, then units which become available for occupancy shall be made available on a priority basis to very low income households or other lower income households, as required, until the number of units so occupied equals at least the number specified in the agreement.

The department and the agency, local finance entity, or local public entity, may reduce the number of assisted units to less than 30 percent of a rental housing development only if necessary to maintain the development’s fiscal integrity. Any reduction in the number of assisted units shall be reviewed annually to determine whether it is necessary to continue that reduction in the number of assisted units.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 2.)

article: 1. Definitions and General Provisions


text:
(a) The Rental Housing Construction Incentive Fund established in the State Treasury is hereby renamed the Rental Housing Construction Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are hereby continuously appropriated to the Department of Housing and Community Development, and, except as provided in subdivisions (b) and (c), shall be utilized for purposes of this chapter, Section 50775.5, and Chapter 15 (commencing with Section 50880). All interest or other increment resulting from investment or deposit of moneys in the fund shall be deposited in the fund, notwithstanding Section 16305.7 of the Government Code. Except as described in subdivision (d), moneys in the fund shall not be subject to transfer to any other fund pursuant to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except the Surplus Money Investment Fund.

(b) An amount not to exceed four million dollars ($4,000,000) of the moneys from the fund utilized by the agency for development costs which is repaid to the agency or disencumbered on or after July 1, 1983, shall be deposited in a separate account and utilized and apportioned in accordance with the following percentages as it becomes available:

(1) Fifty percent of the moneys shall be transferred by the agency to the department and deposited in the Housing Rehabilitation Loan Fund, established pursuant to Section 50661, and utilized for making deferred payment loans for residential hotels as authorized by subdivision (b) of Section 50661 and for purposes of subdivision (c) of that section.

(2) Twenty-five percent of the moneys shall be transferred by the agency to the department for deposit in the Emergency Housing and Assistance Fund, established pursuant to Section 50800.5.

(3) Twenty-five percent of the moneys shall be transferred by the agency to the department for deposit in the annuity fund, established pursuant to Section 50738.5.

(c) Notwithstanding any other provision of law, effective with the date of the act adding this subdivision, appropriations authorized for support of the department from the Family Housing Demonstration Account shall instead be authorized for expenditure from the Rental Housing Construction Fund.

(d) Notwithstanding any other law, the Controller may use the moneys in the Rental Housing Construction Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the Rental Housing Construction Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the Rental Housing Construction Fund was created.

history: (History: Amended by Stats. 2009, 3rd Ex. Sess., Ch. 9, Sec. 15. Effective February 20, 2009.)

article: 1. Definitions and General Provisions


text: If money committed by the department prior to the effective date of the act which enacted this section cannot be used by the local finance entity or housing authority to which funds are committed, the department may allocate these funds to assist any other housing developments, including those financed by the agency, eligible under this chapter.

history: (History: Added by Stats. 1981, Ch. 102.)

article: 1. Definitions and General Provisions


text: Only rental housing developments on which construction is commenced on or after six months from the effective date of this chapter shall be eligible for assistance under this chapter.

article: 1. Definitions and General Provisions


text: For purposes of acting as a local finance entity pursuant to this chapter, a city, county, or city and county may, pursuant to an enabling ordinance of its legislative body, issue revenue bonds to provide below-market interest financing of a rental housing development. Any city, county, or city and county may act jointly with one or more other cities, counties, or cities and counties in the exercise of powers under this section. The proceeds of local revenue bonds issued pursuant to this section shall be used solely to finance rental housing developments containing assisted units, for any and all costs of administering such finance program and for complying with mandated reserve requirements. Any interest or other increment received by a local finance entity acting under the authority of this section from the investment or reinvestment of the proceeds of such revenue bonds, any payments of principal or interest on financing provided by the local finance entity or part of such program, and any other revenues received by the local finance entity in connection with, or for purposes of, such program shall be held and applied solely for the purposes of such program.

article: 1. Definitions and General Provisions


text: Where a local finance entity or local public entity is authorized to receive payments from the annuity fund established pursuant to Section 50748, under a written agreement with the department, the local finance entity or local public entity may with the approval of the department designate in writing either the project sponsor or the sponsor’s approved management agent for the rental housing development as a substitute payee for these payments. Upon the approval of the department and the local finance entity or local public entity, the department shall make the authorized payments directly to the designated payee until the entity and the department agree to revoke or rescind the designation.

history: (History: Added by Stats. 1987, Ch. 1034, Sec. 3.)

article: 1. Definitions and General Provisions


text: The same notice requirements as specified in Section 65863.10 of the Government Code shall apply to rental housing developments that receive financial assistance pursuant to this chapter.

history: (History: Added by Stats. 1988, Ch. 1563, Sec. 4.)

article: 1. Definitions and General Provisions


text:
(a) Upon application by the agency or a local finance entity, the department may contract with the agency or local finance entity to pay all or a portion of the development costs incurred by a sponsor in connection with the construction of a rental housing development which is financed, or otherwise assisted pursuant to subdivision (b), by the agency, local finance entity, or a federal agency.

(b) In lieu of providing financing of a rental housing development at below-market interest, a local finance entity to be eligible for assistance under this article, may utilize other types of subsidies including, but not limited to, federal funds, as authorized by law, which reduce by an equivalent amount the rental levels of a rental housing development.

(c) Pursuant to such a contract the agency or local finance entity shall, in accordance with criteria established by the department, (1) ensure the feasibility of the proposed rental housing development to be financed and assisted pursuant to this chapter, (2) supervise the design and construction of the rental housing development to be financed by it and assisted pursuant to this chapter, and (3) supervise the management of such rental housing development while the financing thereof remains outstanding and unpaid or for a period of 30 years, whichever is greater. The department shall adopt criteria to ensure that a local finance entity has the capability of performing such functions prior to entering a contract pursuant to this section.

history: (History: Amended by Stats. 1979, Ch. 1045.)

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 2. Rental Construction Incentive Program


text:
(a) Notwithstanding any other provision or requirement of this chapter, and any regulations adopted thereunder, the department may contract with the agency, a local finance entity, or a sponsor to pay all or any portion of the development costs incurred in connection with the construction of a rental housing development consistent with the requirements of this section.

(b) Pursuant to this section, funds may be utilized only to assist the development of rental housing developments in Anaheim where the department determines that such assistance is necessary to alleviate hardship resulting from the destruction of rental units in Anaheim caused by a fire which resulted in a state of emergency proclaimed on April 23, 1982, by the Governor, as provided by Section 8625 of the Government Code.

(c) Any rental housing development assisted pursuant to this section shall not be governed by the percentage requirements contained in Section 50736, nor shall units assisted pursuant to this section be used in determining compliance with the percentage requirements contained in Section 50736.

(d) As a condition of assistance provided pursuant to this section, the department may establish such rent levels as the department may determine are necessary to alleviate hardship in the disaster area consistent with the economic feasibility of the assisted rental housing development. Contracts and agreements governing the provision of financial assistance pursuant to this section shall not be subject to the requirements of Sections 50746 and 50749. The department may require such terms and conditions as it determines are necessary to meet the needs of the disaster area and its victims, to ensure fiscal integrity of the rental housing development and to protect the interests of the state. The terms and conditions required by the department, including the restrictions on rent levels for assisted units, shall remain binding on sponsors of developments assisted pursuant to this section, and heirs, successors, and assigns, for a period of at least 20 years or such a longer term as the department may require. The department shall require that priority in occupancy of any units in a development assisted pursuant to this section shall be given first to households of low income, as defined in Section 50093, who have been displaced from their dwelling units as a result of this disaster, and, secondly, to any other victim of this disaster. After no additional victims of this disaster qualify for, or remain in, any assisted units, these units shall be available to, on a priority basis, or occupied by households of low income.

(e) The department may allocate funds to an annuity fund established pursuant to Section 50748, or utilize existing annuity funds, to ensure that the rent levels established by the department are maintained consistent with the fiscal integrity of the rental housing development.

(f) The department may require funds utilized pursuant to this section to be returned to the Rental Housing Construction Fund from the present allocation of funds to the agency. Any repayment of funds originating from the Rental Housing Construction Fund and utilized pursuant to this section shall be utilized by the department pursuant to this chapter.

(g) Any rule, policy or standard of general application employed by the department in implementing the provisions of this section, shall not be subject to the requirements of the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

history: (History: Added by Stats. 1982, Ch. 312, Sec. 8. Effective June 28, 1982.)

article: 2. Rental Construction Incentive Program


text:
Each contract pursuant to Section 50745 shall be recorded or referenced in a recorded document in the office of the county recorder of the county in which the rental housing development is located, and shall be indexed by the recorder in the grantor index to the name of the sponsor and in the grantee index to the name of the State of California. The contract shall contain at least the following provisions:

(a) The amount and terms of payments to be provided under this article, including specific items to be covered by such payments.

(b) A description of the way in which the payments will be used to provide affordable rents to eligible households occupying assisted units within the rental housing development.

(c) Projected rent levels for all units, and the number of units to be occupied by eligible households.

(d) Requirements for payment of prevailing wage rates on construction.

(e) A requirement for a periodic report to be made at least annually by the agency or local finance entity which shall include, at a minimum, information on the fiscal condition of the rental housing development, the maintenance of such development, and the number of units occupied by eligible households.

(f) A provision for department approval prior to the execution of the terms of the regulatory agreement to be entered into between the sponsor and the agency or local finance entity pursuant to Section 50749.

(g) A provision that failure to operate the rental housing development in accordance with the regulatory agreement shall be deemed a violation of the regulatory agreement or deed of trust, as the case may be. In the alternative or in addition, the contract may contain a lien on the rental housing development for the purpose of securing performance of the agreement. Such lien shall include a legal description of the assisted real property which is subject to the lien and shall specify the duration of the lien upon the assisted real property.

(h) Standards which govern selection of tenants by housing sponsors to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739 and the terms of occupancy agreements to be used in rental housing developments.

(i) Provisions sufficient to ensure that dwelling units in the rental housing development available to and occupied by eligible households in accordance with Section 50736 and in accordance with the written agreement required by Section 50739 remain available to such households for a period of not less than 30 years or the duration of the long-term financing, whichever is greater.

(j) Provisions which specify the timing and manner in which payments are made by the department so as to ensure the economic feasibility of the rental housing development and to protect the interests of the state.

(k) A provision making the covenants and conditions of the contract binding upon successors in interest of the sponsor.

( l) When the sponsor is not a nonprofit housing sponsor or a local public entity, a provision limiting distribution of the sponsor’s earnings to an annual amount no greater than 6 percent of the sponsor’s actual investment (excluding unaccrued liabilities of the sponsor) in the rental housing development. The department may allow an earnings distribution of no greater than 10 percent on a nonelderly rental housing development if the department finds it necessary to do so to fulfill the requirements of Section 50736. With respect to such nonelderly rental housing developments, the department may adopt regulations consistent with this section governing the conditions under which an earnings distribution over 6 percent but not to exceed 10 percent may be allowed.

(m) A provision which specifies the conditions under which the department and agency may enforce the regulatory agreement with respect to a rental housing development financed by the agency.

(n) Provisions necessary for the administration, disbursement, and protection of annuity fund payments including provisions specifying the conditions under which the department may recover or reallocate all or any part of such payments for the benefit of eligible households in existing or additional assisted units.

(o) Provisions (1) governing the recovery and reallocation by the department of rent revenues derived by the sponsor from the assisted units and which are not necessary to defray costs of operation attributable to such units and (2) specifying the return on the sponsor’s investment pursuant to subdivision (b). Such rent revenue shall be handled by the department in the same manner as annuity payments recovered pursuant to subdivision (n).

(p) Authorization for the agency or local finance entity to fix and alter rents pursuant to the provisions of subdivision (c) of Section 50749.

(q) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.


text: The development cost payments provided by the department pursuant to this article shall not exceed 100 percent of the development costs of a rental housing development, and shall not exceed the amount required, when considered with any subsidy or assistance provided by the agency, local finance entity or housing sponsor, including below-market interest financing, to ensure the economic feasibility of restricting occupancy of the rental housing development in accordance with Sections 50736 and 50739. The department may defray all or a portion of development costs as they are incurred, or in accordance with a schedule developed pursuant to subdivision (j) of Section 50746.


text:
(a) The department may establish and administer an annuity fund, with respect to rental housing developments assisted under this article or Article 3 (commencing with Section 50755) or Article 4 (commencing with Section 50765) for the purpose of reducing rent levels to ensure occupancy by eligible households pursuant to Sections 50736 and 50739. The annuity funds shall be structured so that the principal and interest accumulated thereon is not depleted prior to the expiration of the agreements or contracts required by Section 50749.

(b) Payments made by the department pursuant to this section shall not constitute a subsidy under subdivision (b) of Section 50745, and shall not constitute an advance payment within the meaning of state law restricting advance payments under state contracts.

(c) The department shall require annual reports on the use of annuity funds and such audits as may be required to ensure the proper use of moneys from the annuity fund. The department shall review all complaints received concerning such trust funds and shall have all powers necessary to assure the lawful application of such funds.

(d) When the amount of moneys made payable from an annuity fund pursuant to this section exceeds the amount necessary to ensure that eligible households in a rental housing development assisted under this chapter are paying affordable rents, or if payments from the annuity fund become unnecessary for such purpose, the department may by contract (1) require that such unneeded moneys be paid into the Rental Housing Construction Incentive Fund or (2) authorize use of such moneys to reduce rents to an affordable level for additional eligible households in the rental development.

(e) Not less than 20 percent of the moneys appropriated for the purposes of this chapter shall be utilized pursuant to this section. However, moneys transferred to the Rental Housing Construction Fund pursuant to subdivision (d) shall be used for any purpose authorized by this chapter.

history: (History: Amended by Stats. 1989, Ch. 1346, Sec. 2. Effective October 2, 1989.)


text:
(a) The department shall from time to time direct the Treasurer to invest moneys set aside or otherwise deposited in the annuity fund established by Section 50748 as an account in the Rental Housing Construction Fund, which are not required for its current needs, in the eligible securities specified in Section 16430 of the Government Code that are designated by the department. The department may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices in this state, or in other investments which are consistent with state policy and achieve returns adequate to fulfill the requirements of this chapter. The department may alternatively require the transfer of moneys in the annuity fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code.

All interest or other increment resulting from the investment or deposit shall be deposited in the annuity fund account, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund are not subject to transfer to any other fund pursuant to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except the Surplus Money Investment Fund.

(b) Upon request of the department, the Controller shall transfer from the annuity fund account in the Rental Housing Construction Fund, an aggregate amount not exceeding five million dollars ($5,000,000) to the Predevelopment Loan Fund. The department shall determine the respective amount to be deposited in these funds.

Transfers made pursuant to this subdivision shall be treated as advances and shall be repaid, with interest specified in this subdivision, within three years of the effective date of transfer of the moneys, except that the department may defer repayment if (1) the balance of moneys in the annuity fund account is sufficient to meet current or anticipated financial obligations and (2) the financial integrity of any component or fund of the Rental Housing Construction Program is not at risk. Moneys advanced pursuant to this subdivision shall be repaid with interest at the rate of 7 percent.

history: (History: Amended by Stats. 2001, Ch. 395, Sec. 13. Effective October 1, 2001.)


text:
Any rental housing development assisted pursuant to this article shall be governed by a regulatory agreement between the sponsor and the agency or local finance entity. Such regulatory agreements shall be recorded or referenced in a recorded document in the office of the county recorder for the county in which the rental housing development is located. The regulatory agreements shall contain at least all of the following:

(a) Restrictions on occupancy of dwelling units within the rental housing development, as necessary to meet the requirements of Sections 50736 and 50739.

(b) A requirement that prevailing wage rates be paid with respect to construction of the rental housing development, and that all contractors and subcontractors use affirmative action in hiring.

(c) The authorization for the agency or local finance entity to fix and alter, from time to time, a schedule of rents such as may be necessary to provide residents of the rental housing development with affordable rents, to the extent consistent with the maintenance of the financial integrity of the rental housing development.

With respect to rental housing developments financed by the agency, no housing sponsor may increase rents except in accordance with the provisions of Section 51200. With respect to units under the supervision of a local finance entity, no housing sponsor shall increase the rent without the prior permission of such entity which shall be given only if the sponsor affirmatively demonstrates that such increase is required to defray necessary operating costs or to avoid jeopardizing the fiscal integrity of the rental housing development. Prior to the time any rent increase is effective, the housing sponsor shall notify every affected tenant, in writing, of informal meetings with the housing sponsor to review the proposed rent increase. Each tenant, upon request, shall be provided the information submitted to the local housing finance entity pursuant to this subdivision.

Notwithstanding Section 51200 with respect to rental housing developments assisted under this article, if the agency or local finance entity does not act upon a request for a rent increase within 60 days from documented receipt of the request, such increase shall be deemed approved.

Thirty days’ notice of any rent increase shall be given in writing.

(d) Provisions implementing standards governing selection of tenants by sponsors to ensure initial and continued occupancy by eligible households consistent with the requirements of Sections 50736 and 50739.

(e) Provisions implementing the terms of occupancy agreements.

(f) Provisions necessary for the administration and protection of annuity trust funds established pursuant to Section 50748 and for recovery and reallocation of annuity fund payments and rent revenues pursuant to subdivisions (n) and (o) of Section 50746.

(g) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

The regulatory agreement shall remain in effect so long as any financing for the rental housing development provided by the agency or local finance entity remains outstanding, but in any event not less than 30 years. The regulatory agreement shall be enforceable as specified in subdivision (m) of Section 50746 by the department, the agency or local finance entity or by any intended beneficiary of housing assisted under this chapter as against the sponsor or any successor in interest of the sponsor.


text: Upon consent of the legislative body of the city or county in which a rental housing development is or will be located, the department may contract with a local finance entity located in a rural area to ensure that the terms of the agreement between such entity and a sponsor entered into pursuant to Section 50749 are carried out.


text:
The department may contract with local public entities to provide funds to be used by those entities to obtain a right of occupancy or leasehold for eligible households in some or all of the units in a rental housing development. In order to maximize the number of units for which a right of occupancy or leasehold is obtained, the payment made by the local public entity in obtaining the right or leasehold shall not exceed the costs of developing the unit. The local public entity may be authorized by the department to pay the entire amount of the development costs as soon as the unit is available for occupancy.

Any contract executed pursuant to this article which provides for a right of occupancy or leasehold in favor of a local public entity shall be recorded or referenced in a recorded document in the office of the county recorder of the county in which the real property is located. The contract shall particularly describe the real property subject to the right of occupancy or leasehold, designate the specific rental units or proportion of the rental housing development subject to the right of occupancy or leasehold, and specify the period for which the right of occupancy or leasehold extends.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 3.)

article: 3. Contracts with Local Public Entities

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 3. Contracts with Local Public Entities


text:
Each contract pursuant to Section 50755 shall be recorded or referenced in a recorded document in the office of the county recorder of the county in which the rental housing development is located, and shall be indexed by the recorder in the grantor index to the name of the sponsor and in the grantee index to the name of the State of California. The contract shall contain all of the following provisions:

(a) The amount and terms of payments to be provided under this article.

(b) A description of the way in which the payments will be used to provide affordable rents to eligible households occupying dwelling units within the rental housing development.

(c) A description of the rental housing development, projected rent levels for all units, and the number of units to be occupied by eligible households.

(d) A requirement for periodic reports by the local public entity, which shall at a minimum include information on the fiscal condition of the rental housing development, the maintenance of the development, and the number of units occupied by eligible households.

(e) The terms of the regulatory agreement to be entered into between the sponsor and the local public entity pursuant to Section 50757 after the department’s approval.

(f) Standards which govern selection of tenants by housing sponsors to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739 and the terms of occupancy agreements to be used in rental housing developments.

(g) Provisions sufficient to ensure that dwelling units shall be available to, or occupied by, eligible households for a period of not less than 30 years.

(h) Provisions which specify the timing and manner in which payments are made by the department so as to ensure the economic feasibility of the rental housing development and to protect the interests of the state.

(i) A provision which specifies the conditions under which the department and any intended beneficiary may enforce the regulatory agreement.

(j) A provision that failure to operate the assisted units in accordance with the regulatory agreement shall be deemed a violation of the regulatory agreement or deed of trust, as the case may be. In the alternative, or in addition, the agreement may contain a lien on the rental housing development for the purpose of securing performance of the agreement. That lien shall include a legal description of the assisted real property which is subject to the lien and shall specify the duration of the lien on the assisted property.

(k) Provisions necessary for the administration, disbursement, and protection of annuity fund payments, including provisions specifying the conditions under which the department may recover or reallocate all or any part of those payments for the benefit of eligible households in additional or existing assisted units.

( l) Provisions that do both of the following:

(1) Govern the recovery and reallocation by the department of rent revenues, derived by the sponsor from the assisted units which are not necessary to defray costs of operation attributable to the units.

(2) Specify the allowable return on the sponsor’s investment.

Those rent revenues shall be handled by the department in the same manner as annuity payments recovered pursuant to subdivision (k).

(m) Authorization for the local public entity to fix and alter rents pursuant to subdivision (a) of Section 50759.

(n) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 4.)

article: 3. Contracts with Local Public Entities


text:
Any rental housing development assisted pursuant to this article shall be governed by a regulatory agreement between the sponsor and the local public entity. The regulatory agreements shall contain all of the following:

(a) Restrictions on occupancy of the dwelling units within the rental housing development necessary to meet the requirements of Sections 50736 and 50739.

(b) A requirement that all contractors and subcontractors use affirmative action in hiring.

(c) Provisions implementing the terms of tenant selection standards and occupancy agreements.

(d) Provisions necessary for the administration and protection of annuity funds established pursuant to Section 50748 and for recapture and reallocation of annuity fund payments and rent revenues pursuant to subdivisions (k) and ( l) of Section 50756.

(e) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 5.)

article: 3. Contracts with Local Public Entities


text: With respect to units for which a local public entity has obtained a leasehold or right of occupancy, the local public entity may manage the units or may contract for management of the units with the housing sponsor or other persons designated by the local public entity, with the approval of the department.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 6.)

article: 3. Contracts with Local Public Entities


text:
With respect to assisted units developed pursuant to this article, the local public entity shall do all of the following:

(a) Ensure the provision of affordable rents.

(b) Ensure that the incomes of tenants are recertified annually.

(c) Ensure that upon income recertification rents are adjusted and take effect within 30 days of adjustment.

(d) Determine standards for, and ensure fair procedures for, the selection of tenants by housing sponsors or other management designated pursuant to Section 50758 to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739.

(e) Regulate the terms of tenant occupancy agreements.

history: (History: Repealed and added by Stats. 1987, Ch. 1034, Sec. 6.)

article: 3. Contracts with Local Public Entities


text:
With respect to units developed pursuant to this article, the local public entity may, and at the direction of the department shall, do any of the following:

(a) Through its agents or employees enter upon and inspect the lands, buildings, equipment, and books and records of the rental housing development at any time before, during, or after construction of the units assisted pursuant to this article. Entry or inspection of any occupied unit is subject to Section 1954 of the Civil Code.

(b) Supervise the operation and maintenance of any housing assisted pursuant to this section and order any repairs necessary to protect the public interest or the health, safety, or welfare of occupants of the housing.

history: (History: Amended by Stats. 1985, Ch. 375, Sec. 8.)

article: 3. Contracts with Local Public Entities


text: The department may contract with local housing authorities and provide funds which shall be used by such authorities to develop and construct rental housing developments to be operated by such housing authorities and to be rented to eligible households.

history: (History: Added by Stats. 1979, Ch. 1043.)

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 4. Contracts for Development and Construction by Local Housing Authorities


text:
Each contract pursuant to Section 50765 shall contain at least the following provisions:

(a) The timing, amount, and terms of payments to be provided under this article, including specific items to be covered by such payments.

(b) A description of the way in which the payments will be used to provide affordable rents to eligible households occupying dwelling units within the rental housing development.

(c) A description of the rental housing development, projected rent levels for all units and the number of units to be occupied by eligible households.

(d) Restrictions on occupancy of dwelling units within the rental housing development, as necessary to meet the requirements of Sections 50736 and 50739.

(e) A requirement that prevailing wage rates be paid with respect to construction of the rental housing development, and that all contractors and subcontractors use affirmative action in hiring.

(f) A requirement for periodic reports by the housing authority, which shall at a minimum include information on the fiscal condition of the rental housing development, the maintenance of such development, and the number of units occupied by eligible households.

(g) Provisions sufficient to ensure that assisted units shall be available to or occupied by eligible households for a period of not less than 30 years.

(h) A provision which specifies the conditions under which the department and any intended beneficiary may enforce the contract.

(i) A provision that failure to operate the assisted units in accordance with the regulatory agreement shall be deemed a violation of the regulatory agreement or deed of trust, as the case may be. In the alternative, or in addition, the contract may contain a lien on the rental housing development for the purpose of securing performance of the contract. Such lien shall include a legal description of the assisted real property which is subject to the lien and shall specify the duration of the lien on the assisted property.

(j) Provisions necessary for the administration, disbursement, and protection of annuity fund payments including provisions specifying the conditions under which the department may recover or reallocate all or any part of such payments for the benefit of eligible households in additional or existing assisted units.

(k) Provisions governing the recovery and reallocation by the department of rent revenues derived by the sponsor from the assisted units, which are not necessary to defray the costs of operation attributable to such units. Such revenues shall be handled by the department in the same manner as annuity payments recovered pursuant to subdivision (j).

( l) Authorization for the local housing authority to fix and alter rents pursuant to the provisions of subdivision (a) of Section 50767.

(m) Any other provisions necessary to carry out the purposes and exercise the powers granted by this chapter.

Any contract pursuant to Section 50765 containing a lien shall be recorded or referenced in a document recorded in the county in which the real property subject to the lien is located and shall be indexed by the recorder in the grantor index to the name of the local housing authority and in the grantee index to the name of the State of California.

history: (History: Amended by Stats. 1980, Ch. 1154.)

article: 4. Contracts for Development and Construction by Local Housing Authorities


text:
With respect to assisted units developed and constructed pursuant to this article, the local housing authority shall, with the approval of the department:

(a) Ensure the provision of affordable rents.

(b) Ensure that the incomes of tenants are recertified annually.

(c) Ensure that upon income recertification rents are adjusted and take effect within 30 days of adjustment.

(d) Determine standards for and ensure fair procedures for, the selection of tenants by housing sponsors or other management designated pursuant to Section 50758 to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739.

(e) Regulate the terms of tenant occupancy agreements.

history: (History: Repealed and added by Stats. 1987, Ch. 1034, Sec. 8.)


text: The department shall monitor the operation at the rental housing development constructed pursuant to this article, to ensure compliance with grant conditions, contract obligations, and the provisions of this chapter and regulations adopted pursuant to this chapter.


text:
Four percent of the funds appropriated for the purposes of this chapter shall be set aside in a Management Reserve Account in the Rental Housing Construction Fund, which is hereby created. All interest or other increment resulting from investment or deposit of moneys in the account shall be deposited in the account.

The department may expend moneys in the account to provide debt service payments or bid at a foreclosure sale, where a loan that is superior to the loan of the department is in default, in order to protect the security or regulatory interest of the department against default, so that, to the extent feasible, the rental charges to eligible households remain affordable. The department may provide assistance from the fund to a rental housing development if the agency or local finance entity affirmatively demonstrates that assistance is necessary to avoid jeopardizing the fiscal integrity of the rental housing development while maintaining affordable rents and if the department determines that assistance is necessary to offset unavoidable increases in costs to protect the security or regulatory interests of the department.

history: (History: Amended by Stats. 1987, Ch. 1034, Sec. 9.)

article: 5. Reserve Account

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 5. Reserve Account


text:
For the purpose of providing deferred payment loans pursuant to this chapter for the development costs of rental housing developments utilizing moneys transferred to the Rental Housing Construction Fund pursuant to paragraph (1) of subdivision (a) of Section 53130 and paragraph (1) of subdivision (b) of Section 53130, the following special provisions shall prevail over conflicting provisions of this chapter:

(a) (1) Applications for fund commitments shall be accepted by the department at any time. Fund commitments shall be based on a ranking of applications which shall occur at least once every three months until there are insufficient funds available to make commitments according to the ranking. In making this ranking, notwithstanding Sections 50737 and 50737.5, priority shall be given to projects which (A) maximize program benefits to eligible households, as defined in Section 50105 with the lowest incomes, (B) maximize program benefits to eligible households needing assisted units with three or more bedrooms, (C) are located in areas where the housing need is great, as determined by the department, taking into consideration, among other factors, variations in local development costs, low vacancy rates, high market rents, and long waiting lists for subsidized housing, (D) complement the implementation of an existing housing program, (E) maximize private, local, and other funding sources, (F) are economically feasible given local market conditions, and (G) maximize the number of units which can be assisted under the program, relative to variances in market conditions for the development of rental housing. Subparagraph (B) above does not apply to applications for residential hotels.

(2) All loans shall be made directly from the department to the housing sponsor which applies to the department and will own, operate, and develop the housing development. The sponsor shall notify the local legislative body of its loan application prior to the funding award.

(3) A sponsor may apply for awards for one or more rental housing developments.

(4) The department shall evaluate the capability of the sponsor to own, construct, and manage the rental housing development.

(b) (1) A rental housing development may utilize any combination of federal, state, local, and private financial resources necessary to make the development affordable, for the term of the state’s regulatory agreement, to eligible households.

(2) (A) Loans to sponsors of housing developments shall be for a term not less than 40 years. After 30 years from the time the loan is made, the sponsor shall begin to repay the loan in accordance with a payment plan, as determined by the department, that will maintain the rents affordable to eligible households.

(B) The term of the loan and the time for repayment may be extended by the department for additional terms as long as the rental housing development is operated in a manner consistent with the regulatory agreement and the sponsor requires an extension in order to continue to operate in a manner consistent with this chapter. Each extension shall be for a period of not less than 10 years and the total term of the revised loan shall not exceed 55 years.

(C) Loans provided under this section shall bear an interest rate of 3 percent per annum. The department, by regulations, shall establish the conditions under which the interest may be reduced, waived, or deferred. At the request of the sponsor, the department may charge a higher interest rate.

(3) (A) Development costs shall include reasonable consulting fees, and other reasonable administrative expenses in connection with the planning and execution of the rental housing development, as determined by the department, and initial funding of emergency reserves, as required by the department. The development costs also shall further include the acquisition and completion of construction of a rental housing development where construction has halted due to financial distress, as determined by the department.

(B) A rental housing development shall include residential hotels, as defined in subdivision (b) of Section 50669, and group homes.

(4) The sponsor shall maintain an emergency reserve to defray unanticipated cost increases or revenue shortfalls to maintain the fiscal integrity of the rental housing development and maintain affordable rents for eligible households.

(5) The department, by regulation, shall specify minimum equity requirements not to exceed 10 percent of total project development costs. This requirement does not apply to proposed projects where assisted units are less than 80 percent of the total number of units.

The department, by regulation, shall define “equity” for the purposes of this section, which shall include, but shall not be limited to, cash, real property, items of personal property having monetary value contributed by the sponsor and applied toward project costs, and the capitalized value of any exemption from local taxes on real property.

(6) The department, by regulation, may specify per-unit loan limits and circumstances under which it may grant exceptions to, or variances from, these limits. The loan amount shall not exceed either 100 percent of the development costs attributable to the assisted units or the amount necessary to maintain affordable rents for the assisted units, as determined by the department.

(c) (1) Initial rents, including a reasonable utility allowance, for assisted units reserved for occupancy by very low income households, and for all assisted units in residential hotels and group homes, shall not exceed 30 percent of 35 percent of area median income, adjusted by unit size. Initial rents, including a reasonable utility allowance, for assisted units reserved for occupancy by lower income households shall not exceed 30 percent of 60 percent of area median income, adjusted by unit size. The department, by regulation, shall specify the method for adjusting rents by unit size and for computing allowances for utility costs.

(2) The department shall develop an inflation index reflecting the annual anticipated changes in rental housing development operating costs from a base year. The inflation index shall be used by the sponsor to adjust the initial rent of each unit occupied by an eligible household to determine the annual rent. Any sponsor may appeal to the department for a greater adjustment in rents necessary to ensure the fiscal integrity of the housing development. If the department does not respond within 60 days, the request shall be deemed approved. A 30-day written notice shall be given to each eligible household prior to an adjustment in the amount of rent.

(3) Upon prior written approval by the department, a sponsor may set income limits for occupancy of assisted units designated for lower income households at a level below the limit specified in Section 50079.5. If a tenant’s income exceeds this income limit established by the sponsor, but does not exceed the limit specified in Section 50079.5, that fact alone shall neither constitute cause for the tenant’s eviction, nor be a violation of the sponsor’s loan agreement.

(4) The monthly rent including a reasonable utility allowance may be reduced by the sponsor, to make the units affordable to the lowest income household possible as long as the project remains economically feasible.

(5) (A) If a household’s income exceeds the standard pursuant to which it was accepted for tenancy, that fact alone shall neither constitute cause for the household’s immediate eviction nor be a violation of the owner’s or sponsor’s loan agreement.

(B) If, after annual income certification, an assisted unit becomes occupied by a household which does not meet the income limits specified in Section 50105, that household shall be permitted to continue to occupy that assisted unit. When there is a vacancy in an assisted unit formerly occupied by a household which meets the income limits specified in Section 50079.5, that unit shall be rented to a household which meets the income limits specified in Section 50105.

(C) If, after annual income certification, an assisted unit becomes occupied by a household which does not meet the income limits specified in Section 50079.5, that household shall be provided a six-month notice of termination. That period may be extended for an additional six-month period in high cost rental areas with low vacancy rates, as determined by the department. That household shall have first right of refusal to occupy any nonassisted unit which becomes available during both periods.

(D) In the case of limited equity housing cooperatives, the provisions of subparagraph (C) shall apply, except that tenants whose incomes, upon recertification, exceed the limit specified in Section 50079.5 shall not be required to vacate their units. Instead, and upon six months’ notice, these tenants shall be required to pay rent in an amount equal to the market rate rent for comparable units, as determined by the department. When a tenant’s income exceeds the limit specified in Section 50079.5, the next available membership share for occupancy in a comparable unit shall be sold to a household with an income at or below this limit.

(d) (1) The department may contract with the sponsor to pay all or a portion of the development costs incurred in connection with the construction of a rental housing development consistent with the requirements of this article. The department shall include such provisions in the contract as are necessary to ensure compliance with the requirements of the program.

Any rental housing development assisted pursuant to this article shall be governed by a regulatory agreement between the sponsor and the department. The regulatory agreement shall be recorded or referenced in a recorded document in the office of the county recorder for the county in which the rental housing development is located. The regulatory agreement shall contain at least all of the following:

(A) Restrictions on occupancy of dwelling units within the rental housing development, to meet the requirements of Section 50736 and this section for a period of at least 40 years.

(B) Provisions governing standards for tenant selection to ensure occupancy by eligible households of very low and low income for the term of the regulatory agreement.

(C) Provisions governing occupancy standards and rental agreements.

(D) Provisions for setting initial rents and rent increases consistent with paragraph (1) of subdivision (c) of Section 50771.1. Prior to the time any rent increase is effective, the sponsor shall notify every affected tenant, in writing, of the availability of informal meetings with the sponsor to review the proposed rent increase. Each tenant, upon request, shall be provided the information submitted to the department pursuant to this subdivision.

(E) A requirement that the sponsor submit to the department for review and approval, annual operating budgets and periodic reports, which shall at a minimum include information on the fiscal condition of the rental housing development, the maintenance of the development, and the number of units occupied by eligible households.

(F) Provisions limiting distribution of sponsor’s earnings as specified in paragraph (4).

(G) A provision which specifies the conditions under which the department and any intended beneficiary may enforce the regulatory agreement.

(H) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

The regulatory agreement shall be recorded against the property and shall be deemed a covenant running with the land and shall be binding upon the sponsor and any and all successors in interest in case of sale or transfer of the rental housing development for the original term of the loan, and any extensions thereof, regardless of any prepayment of the loan.

The department, by regulation, may require such other documents, instruments, and agreements as are reasonable and necessary to ensure compliance with the program requirements.

(2) The contract for the award of development funds to be provided as construction financing for a rental housing development shall contain at a minimum the provisions specified in Section 50766, excluding therefor subdivisions (j), (k), and (l).

(3) All state contracts and regulatory or development agreements subject to this article shall contain provisions requiring that assisted units remain affordable to eligible households for 40 years plus any permitted extension.

(4) A nonprofit sponsor, other than a governmental agency, may maintain a debt service coverage ratio of not more than 115 percent and distribute earnings from both assisted and nonassisted units in an amount no greater than 8 percent of the nonprofit sponsor’s actual investment in the rental housing development. A for-profit sponsor may choose between the following options:

(A) It may distribute earnings from both assisted and nonassisted units in an annual amount no greater than 8 percent of its actual investment in the rental housing development.

(B) It may forego distribution of earnings from assisted units, and not be subject to any limitation on the amount of distributions it receives from nonassisted units.

(e) Where loans will be used in conjunction with federal and other state housing assistance or tax credit and a conflict exists between the other state and federal program requirements and this chapter regarding the test for determining a qualified low-income housing project, the requirements of the Rental Housing Construction Program may be waived only to the extent necessary to permit the federal or other state financial participation or eligibility for tax credits.

(f) (1) The department shall establish specific minimum development criteria to (A) ensure that the useful life of the rental housing development is at least equal to the term of the loan; (B) enhance the physical security of the tenants; (C) minimize long-term operating and maintenance costs; and (D) ensure that project design features and amenities are modest.

(2) No energy standards shall be required of any housing development in excess of the energy standards required for housing developments financed by conventional funding sources.

(3) The department shall employ a licensed architect or an experienced building inspector, or both, to review plans, inspect, and monitor construction of, rental housing developments.

(g) A sponsor of a housing development may receive payments from the annuity fund pursuant to Section 50738 to the extent that there are unobligated moneys available in the fund.

(h) The department shall establish an emergency reserve account in the Rental Housing Construction Fund established pursuant to Section 50740 equal to 3 percent of the moneys transferred to that fund pursuant to Section 53130.

Moneys transferred to the fund pursuant to Section 53130 shall not be subject to the requirements of Section 50770 or be used to ensure economic feasibility or enable construction pursuant to Section 50738. Notwithstanding the provisions of Sections 53130 and 53133, the department may expend moneys in the account to defray unanticipated cost increases or revenue shortfalls not covered by a rental housing development emergency reserve to the extent necessary to maintain the fiscal integrity of a rental housing development and maintain affordable rents for eligible households.

Notwithstanding the provisions of Section 53130 which limit the use of allocated proceeds with respect to project operating costs, and Section 53133, the department may use any amounts available in the account for the purpose of curing or avoiding a sponsor’s defaults on the terms of any loan or other obligation which will jeopardize the financial integrity of a rental housing development or the department’s security in the rental housing development. The payment or advance of any funds by the department pursuant to this subdivision shall be solely within the discretion of the department, and no sponsor shall be entitled to, or have any right to, payment of these funds. Funds advanced pursuant to this subdivision shall be added to the loan amount secured by the deed of trust and shall be payable to the department upon demand.

history: (History: Amended by Stats. 2011, Ch. 239, Sec. 12. (SB 562) Effective January 1, 2012.)

article: 6. Program Requirements

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 9. Rental Housing Construction Program > 6. Program Requirements


text:
(a) As an alternative to the loan provisions of paragraph (2) of subdivision (b) of Section 50771.1 and the regulatory agreement provisions of subdivision (d) of Section 50771.1, the department may permit the prepayment of a sponsor’s loan anytime on the basis of net cash flow.

(b) The department shall develop a prepayment plan in conjunction with the sponsor which will ensure the maintenance of affordable rents and the fiscal integrity of the rental housing development. As an incentive to encourage the prepayment of loans, the department may permit the sponsor to retain one-half of the net cash flow. The department shall determine the method for calculating net cash flow, which may include a factor for excess debt service coverage or a return on cash investment to the sponsor.

history: (History: Added by Stats. 1988, Ch. 30, Sec. 4. Effective March 14, 1988.)

article: 6. Program Requirements


text: The department may adopt, amend, or repeal emergency regulations to implement this chapter with respect to loans made with funds allocated pursuant to Section 53130. The adoption, amendment, or repeal of these regulations shall be conclusively presumed to be necessary for the immediate preservation of the public peace, health, safety, or general welfare within the meaning or purposes of Section 11346.1 of the Government Code. This authority shall remain in effect only until June 30, 1992.

history: (History: Added by Stats. 1991, Ch. 100, Sec. 4. Effective July 1, 1991.)

article: 6. Program Requirements


text:
(a) The department may provide financial assistance, in accordance with this chapter, to households residing in rental housing, or a mobilehome park in which those households rent spaces, which is to be converted to condominium ownership, planned development ownership, as defined in Section 11003 of the Business and Professions Code, or ownership by a stock cooperative corporation, as defined in Section 11003.2 of the Business and Professions Code, for the purpose of assisting those households in acquiring a dwelling unit or a share in the stock cooperative corporation which entitles those households to occupancy of a dwelling unit.

(b) The department may also provide financial assistance for the purpose of assisting households to purchase a mobilehome, as defined in Section 18008, which is located outside a mobilehome park, as defined in Section 18214, and which is affixed to a permanent foundation system.

(c) The financial assistance provided pursuant to subdivision (a) or (b) shall not exceed 49 percent of the purchase price paid by the household for the dwelling unit, mobilehome, or share in the stock cooperative, and in no event shall that assistance be used to reduce the purchaser’s downpayment below 3 percent of the total purchase price.

(d) The department may establish maximum purchase prices for such units, mobilehomes, or shares.

(e) Eligibility for that financial assistance shall be limited to households which meet all of the following conditions:

(1) Their incomes are no greater than the median for the county.

(2) The households do not currently own residential property and have not owned any residential property, other than a mobilehome not affixed to a permanent foundation, for at least three years.

(3) The households have not previously received any assistance pursuant to this chapter.

(4) The households, without financial assistance pursuant to this section, would be unable to acquire a dwelling unit, mobilehome, or a share in a stock cooperative.

(f) As used in this chapter, “dwelling unit” means the dwelling unit that the household occupies, or another dwelling unit not being purchased by its existing tenant within the same rental housing development or mobilehome park. “Dwelling unit” includes a space in a mobilehome park, as defined in Section 18214, and includes a mobilehome rented with the space. “Dwelling unit” also includes factory-built housing, as defined by Section 19971, whether the household occupied that factory-built housing or other factory-built housing in the same rental housing development or mobilehome park.

history: (History: Amended by Stats. 1984, Ch. 1406, Sec. 4.5. Effective September 26, 1984.)

chapter: 10. Homeownership Assistance

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 10. Homeownership Assistance


text:
For the purposes of disaster relief to those households displaced as a result of the Anaheim fire resulting in a state of emergency proclaimed on April 23, 1982, by the Governor, pursuant to Section 8625 of the Government Code, financial assistance may be provided to displaced Anaheim residents as prescribed in this chapter, consistent with the following exceptions:

(a) Condominium, planned development, as defined in Section 11003 of the Business and Professions Code, or stock cooperative units to be purchased with state financial assistance may include existing condominium, planned development, or cooperative units.

(b) Households receiving state assistance to purchase condominium, planned development, or cooperative units need not have resided in such units prior to the purchase thereof.

(c) Eligibility for state financial assistance shall be limited to households which have incomes no greater than 150 percent of the median for the county.

(d) The housing assisted by this section shall not be governed by the percentage requirements in Section 50778, nor shall units assisted pursuant to this section be used in determining compliance with the percentage requirements contained in Section 50778.

(e) Any rule, policy, or standard of general application employed by the department in implementing the provisions of this section shall not be subject to the requirements of the Administrative Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

Any repayment of funds originating from the Homeownership Assistance Fund allocated pursuant to this section shall be utilized by the department pursuant to this chapter.

The provisions of Sections 14 and 15 of Chapter 312 of the Statutes of 1982 shall be applicable to this section as amended by the Statutes of 1983.

history: (History: Amended by Stats. 1983, Ch. 13, Sec. 2. Effective April 7, 1983.)


text:
(a) Financial assistance pursuant to Section 50775 may be provided directly by the department or through a governmental agency or mortgage lender certified by the department to participate in the program authorized by Section 50775. The mortgage lender may be a bank or trust company, mortgage banker, federal-chartered or state-chartered savings and loan association, or other financial institution, including a credit union, deemed capable by the department, pursuant to regulations adopted in accordance with the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, of providing services or mortgage loans in conjunction with dwelling units, mobilehomes, or shares in stock cooperatives for which the financial assistance is provided.

(b) The department, governmental agency, or mortgage lender shall enter into a contract with each recipient of financial assistance under Section 50775, requiring the recipient, upon sale or transfer of the dwelling unit, mobilehome, or share for which the assistance was provided, to pay to the department an amount proportionate to the percentage of the initial purchase price which was paid with financial assistance provided under Section 50775. The contract may provide that the department shall not receive less than the amount of assistance provided under Section 50775. However, if the recipient has made improvements to the dwelling unit or mobilehome, as the case may be, the increase in the fair market value of the unit or mobilehome arising from the improvement shall be added to the fair market value of the recipient’s share in that unit or mobilehome immediately before these improvements are made, to determine the recipient’s relative financial participation for the purpose of calculating the amount to be paid to the department. Improvements which may be added to the purchase price for this purpose shall be defined by regulations of the department, adopted in accordance with Chapter 3.5 (commencing with Section 11430) of Part 1 of Division 3 of Title 2 of the Government Code, and shall be limited to substantial repairs, renovations, or additions undertaken with respect to the dwelling unit or mobilehome assisted, which increase the value of the dwelling unit or mobilehome, or which bring that dwelling unit or mobilehome into conformance with local or state building or housing standards.

(c) Any contract pursuant to this section may permit the recipient of financial assistance to terminate the contract upon payment to the department of the amount which would be owed the department if the dwelling unit, mobilehome or share were sold at fair market value at the time of the repayment. These contracts, subject to regulations adopted by the department, may also permit partial repayments prior to sale or transfer.

(d) Contracts pursuant to this section shall require payment of the full amount of property taxes, insurance, and costs of normal maintenance by the household receiving assistance pursuant to Section 50775, and compliance with restrictions on occupancy, including owner-occupancy, as required by the department. Every contract required by this section shall be secured by a deed of trust, security, or other interest determined adequate by the department to protect the interests of the state. These deeds of trust, security, or other instruments shall be recorded in the office of the county recorder of the county in which the dwelling unit is located.

(e) The contract shall require the recipient of financial assistance to comply with all terms and conditions of, and to make all payments required by, any instrument secured by the dwelling unit.

(f) (1) The department may set aside or use funds that are made available pursuant to this chapter for the purposes of curing or averting a default on the terms of any loan or other obligation by the recipient of financial assistance, or bidding at any foreclosure sale, where the default or foreclosure sale would jeopardize the department’s security in the dwelling unit assisted pursuant to this chapter.

(2) The department may set aside or use funds made available pursuant to this chapter to repair or maintain any dwelling unit assisted pursuant to this chapter which was acquired to protect the department’s security interest in the dwelling unit.

(3) The payment or advance of funds by the department pursuant to this subdivision shall be exclusively within the department’s discretion, and no person shall be deemed to have any entitlement to the payment or advance of those funds. The amount of any funds expended by the department for purposes of curing or averting a default shall be added to any loan amount secured by the deed of trust and shall be payable to the department upon demand.

history: (History: Amended by Stats. 1992, Ch. 1022, Sec. 3. Effective January 1, 1993.)


text:
(a) The department, directly or through a government agency or mortgage lender, and subject to the provisions of subdivision (a) of Section 50776, may provide financial assistance to nonprofit corporations and stock cooperative corporations to enable these corporations to develop or purchase a mobilehome park, ownership of which will be transferred within a reasonable time to shareholders or owners who are persons and families of low or moderate income. Such financial assistance shall not exceed 49 percent of the purchase price or development costs of the mobilehome park which may be directly attributed to the number or ratio of persons or families with incomes, not in excess of the median income of the county, who will occupy the park. Assistance pursuant to this subdivision shall not render a person or household ineligible for assistance pursuant to subdivision (b).

(b) The department, directly or through a governmental agency or mortgage lender, and subject to the provisions of subdivision (a) of Section 50776, may provide financial assistance to persons or families with incomes not in excess of the median income for the county in which the mobilehome park is located to enable such persons or families to purchase a share in a stock cooperative corporation which owns a mobilehome park. In order to be eligible for assistance pursuant to this section, these persons and families in addition shall be limited to households (1) which do not currently own residential property and have not owned any residential property, other than a mobilehome not affixed to a permanent foundation, for at least three years, (2) which have not previously received any assistance pursuant to this chapter and (3) which, without financial assistance pursuant to this section, would be unable to acquire a dwelling unit, mobilehome, or a share in a stock cooperative. Such assistance shall not exceed 49 percent of the purchase price paid by the household for the share in the stock cooperative. The department may establish a maximum purchase price for such shares. Upon sale or transfer of a share the purchase of which is assisted pursuant to this section, the shareholder shall pay to the department an amount proportionate to the percentage of the initial purchase price which was paid with financial assistance provided by the department pursuant to this section, as adjusted for improvements made by the corporation or shareholder. The contract for assistance may require that the department not receive in repayment less than the amount of assistance originally provided. The adjustment for improvements shall be made as set forth in Section 50776.

(c) In no event shall the assistance provided pursuant to subdivision (a) or (b) be used to reduce the purchaser’s downpayment below 3 percent of the total purchase price.

(d) Upon sale or transfer of a mobilehome park assisted pursuant to this section, the corporation which owns such park shall pay to the department an amount proportionate to the percentage of the initial purchase price or development cost which was paid by the department pursuant to this section, as adjusted for improvements made by the corporation. The contract for assistance may require that the department not receive in repayment less than the amount of assistance originally provided. The adjustment for improvements shall be made as set forth in Section 50776. For this purpose “improvements” shall be defined by regulations of the department, adopted in accordance with the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and shall be limited to substantial repairs, renovations or additions which increase the value of the mobilehome park or of the shares of the corporation or which bring such mobilehome parks or mobilehomes within mobilehome parks assisted pursuant to this section into conformance with local or state building or housing standards.

(e) Financial assistance shall be provided pursuant to a contract which requires, among other things, restrictions on occupancy, including owner occupancy maintenance and payment of the full amount of taxes and insurance by the shareholders. Every contract required by this section shall be secured by a deed of trust, security, or other interest determined adequate by the department to protect the interests of the state. The deeds of trust, security, or other instruments shall be recorded in the office of the county recorder of the county in which such mobilehome park is located.

(f) Any contract pursuant to this section may permit the recipient of financial assistance to terminate the contract required by this section upon payment to the department of the amount which would be owed to the department if the mobilehome park or share in a stock cooperative, as the case may be, were sold at fair market value at the time of such repayment. These contracts, subject to regulations adopted by the department, may also permit partial repayments prior to sale or transfer.

(g) Contracts pursuant to this section shall also require that the recipient comply with all terms and conditions of, and make all payments required by, any instrument secured by the park or shares in the stock cooperative.

history: (History: Amended by Stats. 1982, Ch. 1020, Sec. 16.)


text:
(a) The Homeownership Assistance Fund is hereby created in the State Treasury and, notwithstanding Section 13340 of the Government Code, is continually appropriated to the department for purposes of this chapter, including Section 50775.5, and for the purposes of Section 50745.1. Any moneys received by the department pursuant to this chapter shall be deposited in such fund. All interest or other increment resulting from investment or deposit of moneys in the fund shall be deposited in the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provisions of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.

(b) Not less than 50 percent of the moneys in the fund shall be used to assist lower income households. Not less than 20 percent of the units assisted shall be in rural areas.

(c) Funds available for the purpose of this chapter shall be allocated by the department throughout the state in accordance with identified housing needs.

(d) (1) Notwithstanding any other provision of law, commencing on July 1, 1992, the department shall not be required to make loans pursuant to this chapter.

(2) The department may retain within the fund moneys necessary for administration and monitoring of loans made prior to July 1, 1992, to make loans pursuant to loan commitments made prior to July 1, 1992. The department may also retain reserves for curing or averting a default that would jeopardize any security interest of the department.

(3) Notwithstanding any other provision of law, on or after July 1, 1996, the unencumbered fund balance and reserves shall be transferred to the Housing Rehabilitation Loan Fund. Subsequent income and resources shall be deposited to the Housing Rehabilitation Loan Fund.

history: (History: Amended by Stats. 1996, Ch. 201, Sec. 22. Effective July 22, 1996.)


text:
(a) The Legislature finds and declares as follows:

(1) That manufactured housing and mobilehome parks provide a significant source of homeownership for California residents, but increasing costs of mobilehome park development and construction, combined with the costs of manufactured housing, the costs of financing and operating these parks, the low vacancy rates, and the pressures to convert mobilehome parks to other uses increasingly render mobilehome park living unaffordable, particularly to those residents most in need of affordable housing.

(2) That state government can play a role in addressing the problems confronted by mobilehome park residents with available financing that makes it possible for mobilehome park residents to acquire the mobilehome parks in which they reside and convert them to resident ownership.

(3) That a significant number of older mobilehome parks exist in California, the residents of which may collectively lack the experience or other qualifications necessary to successfully own and operate their parks; that these parks provide low-cost housing for their residents that would be difficult to replace if the parks were converted to other uses; and that these parks are more likely than other parks to be threatened by physical deterioration or conversion to other uses.

(b) Therefore, it is the intent of the Legislature, in enacting this chapter, to encourage and facilitate the conversion of mobilehome parks to resident ownership or ownership by qualified nonprofit housing sponsors or by local public entities, to protect low-income mobilehome park residents from both physical and economic displacement, to obtain a high level of private and other public financing for mobilehome park conversions, and to help establish acceptance for resident-owned, nonprofit-owned, and government-owned mobilehome parks in the private market.

history: (History: Amended by Stats. 2022, Ch. 70, Sec. 24. (SB 197) Effective June 30, 2022.)

chapter: 11. Mobilehome Park Purchase Fund

path: 31. HOUSING AND HOME FINANCE > 2. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT > 11. Mobilehome Park Purchase Fund