text: The Legislature finds and declares that the construction of federally assisted housing for persons and families of low or moderate income is not a primary purpose of this part. However, nothing in this part shall be deemed to prohibit financing of federally assisted housing for persons and families of low or moderate income.


kind: section

code: HSC

text:
The Legislature finds and declares all of the following:

(a) The ownership and occupancy of a home is a fundamental element in the fabric of the American way of life.

(b) The rapid appreciation in the value of homes in California which has occurred and is accelerating in recent years has made it impossible for many young persons and families who have never owned their own home to obtain the necessary financing to purchase their own home.

(c) Rising costs and resulting inability of first-time homebuyers to purchase their first home is inimical to the welfare of a substantial segment of the population and, with few exceptions, beyond the capability of private enterprise acting alone to cure, and a public purpose is served by facilitating the entry into the housing market of first-time homebuyers who would be unable to finance the purchase of their first home without the kind of financial assistance provided by this part.

(d) Authorization for the making of home mortgages to first-time homebuyers by cities and counties under this part will enable many persons and families who are otherwise unable to do so to take out a loan for the purpose of becoming a homeowner for the first time.

history: (History: Added by Stats. 1990, Ch. 1297, Sec. 1.)

division: 31. HOUSING AND HOME FINANCE

part: 5. LOCAL HOUSING FINANCE AGENCIES

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 1. Legislative Findings and Declarations


text: Unless otherwise indicated by the context, the definitions contained in this chapter shall govern the construction of this part. The definitions contained in Chapter 2 (commencing with Section 50050) of Part 1 of this division shall not be applicable to this part, except as expressly and otherwise provided.

history: (History: Added by Stats. 1979, Ch. 1069.)

chapter: 2. Definitions

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 2. Definitions


text: “Bonds” means the revenue bonds authorized under this part and includes notes and any and all other limited obligations or evidences of indebtedness payable as provided in this part.


text: “City” or “county” includes a city and county and also includes any agency created by a joint powers agreement under Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code entered into by cities or counties, or both, for the express purpose of the joint exercise of their powers under this part.

history: (History: Amended by Stats. 1981, Ch. 1097.)


text: “Home” means real property and improvements thereon consisting of a single dwelling unit and which is owned by a mortgagor who occupies or intends to occupy the unit. “Home” includes an owner-occupied condominium unit, a unit in a stock cooperative where the occupant is a shareholder, and any dwelling structure consisting of two-, three-, or four-family dwelling units, one unit of which is occupied by the owner of the units, and, which units were first occupied as homes at least five years before the mortgage with respect to the owner-occupied unit is executed.

history: (History: Amended by Stats. 1987, Ch. 497, Sec. 1.)


text:
For purposes of this chapter, “first-time homebuyer” means a person who is a purchaser of an owner-occupied housing unit and who neither has, nor has had, a present ownership in a principal residence at any time during the three-year period prior to the date on which the mortgage governed by this chapter is executed.

Criteria established pursuant to subdivision (c) of Section 52020.5 shall include criteria for qualification of first-time homebuyers which need not include the criteria required for qualification of other mortgagors as set forth in subdivision (d) of Section 52020.5.

history: (History: Added by Stats. 1990, Ch. 1297, Sec. 2.)


text:
(a) “Home mortgage” or “mortgage” means an interest-bearing loan made as provided in this part to a mortgagor, whether originated in the manner provided in subdivision (a) or (b) of Section 52020 that is evidenced by a promissory note and secured by a mortgage, deed of trust, or other security instrument on a home, and that may but is not required to be additionally secured by insurance on the payment of the note for the purpose of purchasing, constructing, or improving a home that meets either of the following criteria:

(1) Is newly constructed or is being rehabilitated and that, in either case, is located within an area or neighborhood in which the city or county is conducting a housing rehabilitation or code enforcement program, a neighborhood preservation area or concentrated rehabilitation area designated pursuant to this division, an area for which federal funds are being made available, or a residential rehabilitation area as defined in Section 37912. However, a loan may be made for the purchase of a newly constructed home anywhere within the city or county if the purchase is in connection with a program adopted by ordinance of the city or county the purpose of which is to increase the housing supply.

(2) Is a home upon which no rehabilitation is being undertaken in connection with any financing pursuant to this part, where the purchaser will not be the first occupant, and that is located within the city or county making or purchasing the home mortgage.

(b) A “home mortgage” or “mortgage” shall not include a loan to a mortgagor for the purpose of refinancing an existing obligation of the mortgagor, unless substantial rehabilitation is to be undertaken in connection with the loan.

(c) This section shall become operative January 1, 2012.

history: (History: Amended (as added by Stats. 2008, Ch. 283, Sec. 2) by Stats. 2009, Ch. 140, Sec. 117. (AB 1164) Effective January 1, 2010. Section operative January 1, 2012, by its own provisions.)


text:
(a) “Home mortgage” or “mortgage” means an interest-bearing loan made as provided in this part to a mortgagor, whether originated in the manner provided in subdivision (a) or (b) of Section 52020.5, which is evidenced by a promissory note and secured by a mortgage, deed of trust, or other security instrument on a home, and which may, but is not required to be, additionally secured by insurance on the payment of that note, for the purpose of purchasing, constructing, or improving a home which meets either of the following criteria:

(1) Is newly constructed or is being rehabilitated and which, in either case, is located within an area or neighborhood in which the City of Gardena is conducting a housing rehabilitation or code enforcement program; a neighborhood preservation area or concentrated rehabilitation area designated pursuant to this division; an area for which federal funds are being made available; a renewal area as defined in Section 33702; or a residential rehabilitation area as defined in Section 37912; provided, however, that a loan may be made for the purchase of a newly constructed home anywhere within the City of Gardena if the purchase is in connection with a program adopted by ordinance of the City of Gardena the purpose of which is to increase the housing supply.

(2) Is a home upon which no rehabilitation is being undertaken in connection with any financing pursuant to this part, where the purchaser will not be the first occupant and which is located within the City of Gardena.

(b) “Home mortgage” or “mortgage” includes a loan made as provided in this part to a first-time homebuyer, as defined in Section 52012.5, which provides for the following terms:

(1) The purchaser shall make an initial payment of at least 5 percent of the selling price of the property.

(2) The balance of the purchase price may be amortized over a period fixed by the City of Gardena not exceeding 50 years, together with interest thereon at the rate as determined by the City of Gardena for amortization purposes.

(3) The City of Gardena may, in order to allow the buyer to purchase the home selected without incurring excessive monthly payments, at the time of initial purchase, postpone the commencement of any portion of the payments for not to exceed five years. In accordance with previously established criteria for these determinations, that the buyer’s income can reasonably be expected to increase sufficiently within the five-year period to make the transition to fully amortized principal and interest payments.

(4) The total term of the contract of purchase shall not exceed 40 years. The purchaser on any installment date may pay any or all installments still remaining unpaid.

(5) In any individual case the City of Gardena may for good cause postpone from time to time as the City of Gardena deems proper, the payment of the whole or any part of any installment of the purchase price or interest thereon.

(c) A “home mortgage” or “mortgage” shall not include a loan to a mortgagor for the purpose of refinancing an existing obligation of the mortgagor, unless substantial rehabilitation is to be undertaken in connection with that loan.

history: (History: Added by Stats. 1990, Ch. 1297, Sec. 3.)


text: “Lending institution” means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, or other financial institution or governmental agency which customarily provides service or otherwise aids in the financing of home mortgages, or any holding company for any of the foregoing.


text: “Mortgagor” means a person or persons who have received a home mortgage on a home and who are deemed by a city or county conducting a program under this part to be a person or family of low or moderate income and unable to pay the amounts at which unassisted private enterprise is providing suitable, decent, safe, and sanitary housing.


text: “Mortgagor” means a person or persons who have received a home mortgage on a home and who are deemed by the City of Gardena under this part to be either a person or family of low or moderate income or a first-time homebuyer, who is unable to pay the amounts at which unassisted private enterprise is providing suitable, decent, safe, and sanitary housing.

history: (History: Added by Stats. 1990, Ch. 1297, Sec. 4.)


text: “Person” means any individual, partnership, copartnership, firm, company, corporation, limited liability company, lending institution, association, joint stock company, trust, estate, political subdivision, state agency or any other legal entity, or its legal representatives, agents or assigns.

history: (History: Amended by Stats. 1994, Ch. 1010, Sec. 171. Effective January 1, 1995.)


text:
(a) For purposes of a home financing program authorized by this part, a city or county has the following powers and duties:

(1) To acquire, contract, and enter into advance commitments to acquire home mortgages made or owned by lending institutions at the purchase prices and upon the other terms and conditions as shall be determined by the city or county or other person as it may designate as its agent, to make and execute contracts with lending institutions for the origination and servicing of home mortgages, and to pay the reasonable value of services rendered under those contracts. Prior to executing any contract with a lending institution, a city or county shall adopt regulations establishing criteria for qualification of lending institutions eligible to originate and service home mortgages under home financing programs authorized by this part and shall, with respect to each home financing program, permit each qualified lending institution that transacts business in the city or county the opportunity to participate in the program on an equitable basis with other participating lending institutions. Two or more cities in the same county, a county and one or more cities within the county, or two or more adjacent counties and any number of cities within those counties may enter into an agreement to join or cooperate with one another in the exercise jointly, or otherwise, of any or all of their powers for the purpose of financing home mortgages pursuant to this part with respect to property within the boundaries of any one or more of the entities.

(2) To make loans to lending institutions under terms and conditions that, in addition to other provisions as determined by the city or county, require the lending institutions to use all of the net proceeds thereof, directly or indirectly, for the making of home mortgages in an aggregate principal amount equal to the amount of the net proceeds.

(3) To establish, by rules or regulations, in resolutions relating to any issuance of bonds, or in any documents relating to the issuance, standards and requirements applicable to the purchase of home mortgages or the making of loans to lending institutions as the city or county deems necessary or desirable to effectuate the purposes of this part, which may include without limitation any of the following:

(A) The time within which lending institutions are required to make commitments and disbursements for home mortgages.

(B) The location and other characteristics of homes to be financed by home mortgages.

(C) The terms and conditions of home mortgages to be acquired.

(D) The amounts and types of any insurance coverage required on homes, home mortgages, and bonds.

(E) The representations and warranties of lending institutions confirming compliance with the standards and requirements.

(F) Restrictions as to interest rate and other terms of home mortgages or the return realized therefrom by lending institutions.

(G) The type and amount of collateral security to be provided to assure repayment of any loans from the city or county and to assure repayment of bonds.

(H) Any other matters related to the purchase of home mortgages or the making of loans to lending institutions as deemed relevant by the city or county.

(4) To require from each lending institution from which home mortgages are purchased or to which loans are made the submission of evidence satisfactory to the city or county of the ability and intention of the lending institution to make home mortgages, and the submission, within the time specified by the city or county for making disbursements for home mortgages, of evidence satisfactory to the city or county of the making of home mortgages and of compliance with any standards and requirements established by it.

(b) Each city or county that finances housing pursuant to this part shall designate a person or entity to administer the program.

(c) Each city or county that finances housing pursuant to this part shall adopt regulations establishing criteria for qualification of persons and families, which may differ among different cities or counties to reflect varying economic and housing conditions. In developing these criteria, factors similar to the following shall be taken into consideration:

(1) The amount of the income of the person or family that is available for housing needs.

(2) The size of the household.

(3) The costs and condition of available housing.

(4) The eligibility of the persons or families for federal housing assistance of any type.

(d) (1) Criteria for qualification of persons and families pursuant to this section shall include a maximum household income, which maximum shall not exceed the following:

(A) One hundred twenty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant. Upon the resale of a home for which financing was originally provided under this paragraph, the maximum income of persons and families also shall be 120 percent of the median household income.

(B) One hundred twenty percent of the median household income for mortgages where the purchaser will not be the first occupant. However, the city or county shall ensure that no less than 50 percent of the funds allocated for home mortgages where the purchaser will not be the first occupant shall be for households whose income does not exceed 80 percent of that median household income. However, the legislative body of the city or county may, by resolution, increase this income limitation to 90 percent of median household income if the legislative body finds that there are insufficient numbers of creditworthy persons whose income does not exceed 80 percent of median household income. The resolution is final and conclusive as to the findings required by this paragraph.

(C) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant in any city, the entire area of which, or in any county in which a portion of the county, is designated by the United States Department of Commerce, Economic Development Administration as a special impact area within a Title IV redevelopment area, pursuant to Section 401 of the federal Public Works and Economic Development Act of 1965, as amended, and that is eligible for Urban Development Action Grant funds under the current distress standards established for cities and counties by the Secretary of the United States Department of Housing and Urban Development pursuant to Section 119 of the Housing and Community Development Act of 1974, if the homes purchased or improved are situated within the boundaries of a special impact area as defined by the Economic Development Administration, and that designation is in effect on the date of sale of revenue bonds issued under this part.

(2) As used in this subdivision, “median household income” means the highest of (A) statewide median household income, (B) countywide median household income, or (C) median family income for an area, as determined by the United States Department of Housing and Urban Development, with respect to either a standard metropolitan statistical area or an area outside of a standard metropolitan statistical area.

(e) (1) Subdivision (d) shall not apply with respect to home finance programs funded with amounts made available by the issuance of revenue bonds that, for federal tax law purposes, are bonds refunding qualified mortgage bonds issued before January 1, 1987, and that satisfy the requirements of subdivision (a) of Section 1313 of the federal Tax Reform Act of 1986. With respect to these programs, the maximum household income for qualification of persons and families pursuant to this section shall be the following:

(A) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant. Upon the resale of a home for which financing was originally provided under this paragraph, the maximum income of persons and families also shall be 150 percent of the median household income. For purposes of this paragraph, a mortgage made for improving a home includes a home improvement loan as defined in Section 143 of Title 26 of the United States Code.

(B) One hundred twenty percent of the median household income where the purchaser will not be the first occupant. However, the city or county shall ensure that no less than 20 percent of the funds allocated for home mortgages where the purchaser will not be the first occupant shall be for households whose income does not exceed 110 percent of that median household income. However, the legislative body of the city or county may, by resolution, increase this income limitation to 120 percent of the median household income if the legislative body finds that there are insufficient numbers of creditworthy persons whose income does not exceed 110 percent of the median household income. The resolution is final and conclusive as to the findings required by this paragraph. However, the finding shall not be made by the legislative body before six months from the date mortgages were first made under the program and only if participating lenders have entered into an agreement with the city, county, or city and county that lenders will advertise at least monthly the availability of funds and will forfeit one-quarter of their origination fees if they are unable to use 20 percent of the funds to make mortgages to households whose income does not exceed 110 percent of the median income.

(C) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant in any city, the entire area of which, or in any county in which a portion of the county, is designated by the United States Department of Commerce, Economic Development Administration as a special impact area within a Title IV redevelopment area, pursuant to Section 401 of the federal Public Works and Economic Development Act of 1965, as amended, and that is eligible for Urban Development Action Grant funds under the current distress standards established for cities and counties by the Secretary of the United States Department of Housing and Urban Development pursuant to Section 119 of the Housing and Community Development Act of 1974, if the homes purchased or improved are situated within the boundaries of a special impact area as defined by the Economic Development Administration, and that designation is in effect on the date of sale of revenue bonds issued under this part.

(2) As used in this subdivision, “median household income” means the highest of (A) statewide median household income, (B) countywide median household income, or (C) median family income for an area, as determined by the United States Department of Housing and Urban Development, with respect to either a standard metropolitan statistical area or an area outside of a standard metropolitan statistical area.

(f) Each city or county that finances housing pursuant to this part shall require each mortgagor under the program to certify his or her intention to occupy the home for a minimum of two years after receiving a home mortgage, with appropriate exceptions in hardship cases determined by the city or county.

(g) Each city and county may do any and all things necessary to carry out the purposes and exercise the powers expressly granted by this part.

(h) This section shall become operative January 1, 2012.

history: (History: Repealed (in Sec. 1) and added by Stats. 2008, Ch. 283, Sec. 4. Effective January 1, 2009. Section operative January 1, 2012, by its own provisions.)

chapter: 3. Home Financing

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 3. Home Financing


text:
(a) For purposes of a home financing program authorized by this part, the City of Gardena has the following powers and duties:

(1) To acquire, contract, and enter into advance commitments to acquire, home mortgages made or owned by lending institutions at the purchase prices and upon the other terms and conditions as shall be determined by the City of Gardena or other person as it may designate as its agent, to make and execute contracts with lending institutions for the origination and servicing of home mortgages and to pay the reasonable value of services rendered under those contracts. Prior to executing any contract with a lending institution, the City of Gardena shall adopt regulations establishing criteria for qualification of lending institutions eligible to originate and service home mortgages under home financing programs authorized by this part and shall, with respect to each home financing program, permit each qualified lending institution which transacts business in the City of Gardena the opportunity to participate in the program on an equitable basis with other participating lending institutions.

(2) To make loans to lending institutions under terms and conditions which, in addition to other provisions as determined by the City of Gardena, require the lending institutions to use all of the net proceeds thereof, directly or indirectly, for the making of home mortgages in an aggregate principal amount equal to the amount of the net proceeds.

(3) To establish, by rules or regulations, in resolutions relating to any issuance of bonds or in any documents relating to the issuance, standards and requirements applicable to the purchase of home mortgages or the making of loans to lending institutions as the City of Gardena deems necessary or desirable to effectuate the purposes of this part, which may include without limitation any of the following:

(A) The time within which lending institutions are required to make commitments and disbursements for home mortgages.

(B) The location and other characteristics of homes to be financed by home mortgages.

(C) The terms and conditions of home mortgages to be acquired.

(D) The amounts and types of any insurance coverage required on homes, home mortgages and bonds.

(E) The representations and warranties of lending institutions confirming compliance with the standards and requirements.

(F) Restrictions as to interest rate and other terms of home mortgages or the return realized therefrom by lending institutions.

(G) The type and amount of collateral security to be provided to assure repayment of any loans from the City of Gardena and to assure repayment of bonds.

(H) Any other matters related to the purchase of home mortgages or the making of loans to lending institutions as deemed relevant by the City of Gardena.

(4) To require from each lending institution from which home mortgages are purchased or to which loans are made the submission of evidence satisfactory to the City of Gardena of the ability and intention of the lending institution to make home mortgages, and the submission, within the time specified by the City of Gardena for making disbursements for home mortgages, of evidence satisfactory to the City of Gardena of the making of home mortgages and of compliance with any standards and requirements established by it.

(b) The City of Gardena shall designate a person or entity to administer the program.

(c) The City of Gardena shall adopt regulations establishing criteria for qualifications of persons and families. In developing this criteria, factors similar to the following shall be taken into consideration:

(1) The amount of the income of the person or family that is available for housing needs.

(2) The size of the household.

(3) The costs and condition of available housing.

(4) The eligibility of the persons or families for federal housing assistance of any type.

(5) That first-time homebuyers eligible to be assisted under this section be California residents whose annual gross income does not exceed 35 percent of the median area purchase price of a resale house as determined by the City of Gardena.

(6) The purchase price of homes eligible to be assisted does not exceed 100 percent of the median area purchase price of resale homes.

(d) Criteria for qualification of persons and families pursuant to this section shall include a maximum household income, which maximum shall not exceed the following:

(1) One hundred twenty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant. Upon the resale of a home for which financing was originally provided under this paragraph, the maximum income of persons and families shall also be 120 percent of the median household income.

(2) The median household income where the purchaser will not be the first occupant. However, the City of Gardena shall ensure that no less than 50 percent of the funds allocated for home mortgages where the purchaser will not be the first occupant shall be for households whose income does not exceed 80 percent of that median household income. However, the legislative body of the City of Gardena may, by resolution, increase this income limitation to 90 percent of median household income if the legislative body finds that there are insufficient numbers of creditworthy persons whose income does not exceed 80 percent of median household income. The resolution is final and conclusive as to the findings required by this paragraph.

(3) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant in the City of Gardena if that city designated by the United States Department of Commerce, Economic Development Administration as a special impact area within a Title IV redevelopment area, pursuant to Section 401 of the federal Public Works and Economic Development Act of 1965, as amended, and which is eligible for Urban Development Action Grant funds under the current distress standards established for cities by the Secretary of the United States Department of Housing and Urban Development pursuant to Section 119 of the Housing and Community Development Act of 1974, if the homes purchased or improved are situated within the boundaries of a special impact area as defined by the Economic Development Administration, and that designation is in effect on the date of sale of revenue bonds issued under this part.

As used in this subdivision, “median household income” means the highest of (A) statewide median household income, (B) countywide median household income, or (C) median family income for area as determined by the United States Department of Housing and Urban Development, with respect to either a standard metropolitan statistical area or an area outside of a standard metropolitan statistical area.

(e) Subdivision (d) shall not apply with respect to home finance programs funded with amounts made available by the issuance of revenue bonds that (1) for federal tax law purposes are bonds refunding qualified mortgage bonds issued before January 1, 1987, and (2) satisfy the requirements of subdivision (a) of Section 1313 of the federal Tax Reform Act of 1986. With respect to these programs, the maximum household income for qualification of persons and families pursuant to this section shall be the following:

(1) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant. Upon the resale of a home for which financing was originally provided under this paragraph, the maximum income of persons and families shall also be 150 percent of the median household income. For purposes of this paragraph, a mortgage made for improving a home includes a home improvement loan as defined in Section 143 of Title 26 of the United States Code.

(2) One hundred twenty percent of the median household income where the purchaser will not be the first occupant. However, the City of Gardena shall ensure that no less than 20 percent of the funds allocated for home mortgages where the purchaser will not be the first occupant shall be for households whose income does not exceed 110 percent of that median household income. However, the legislative body of the city or county may, by resolution, increase this income limitation to 120 percent of the median household income if the legislative body finds that there are insufficient numbers of creditworthy persons whose income does not exceed 110 percent of the median household income. The resolution is final and conclusive as to the findings required by this paragraph. However, the finding shall not be made by the legislative body before six months from the date mortgages were first made under the program and only if participating lenders have entered into an agreement with the City of Gardena that lenders will advertise at least monthly the availability of funds and will forfeit one-quarter of their origination fees if they are unable to use 20 percent of the funds to make mortgages to households whose income does not exceed 110 percent of the median income.

(3) One hundred fifty percent of the median household income for mortgages made for improving a home or for homes where the purchaser will be the first occupant in the City of Gardena if that city is designated by the United States Department of Commerce, Economic Development Administration as a special impact area within a Title IV redevelopment area, pursuant to Section 401 of the federal Public Works and Economic Development Act of 1965, as amended, and which is eligible for Urban Development Action Grant funds under the current distress standards established for cities by the Secretary of the United States Department of Housing and Urban Development pursuant to Section 119 of the Housing and Community Development Act of 1974, if the homes purchased or improved are situated within the boundaries of a special impact area as defined by the Economic Development Administration, and that designation is in effect on the date of sale of revenue bonds issued under this part.

As used in this subdivision, “median household income” means the highest of (1) statewide median household income, (2) countywide median household income, or (3) median family income for the area as determined by the United States Department of Housing and Urban Development, with respect to either a standard metropolitan statistical area or an area outside of a standard metropolitan statistical area.

(f) (1) Except as otherwise provided in paragraphs (2) and (3), the City of Gardena shall allocate no less than 60 percent of the dollar amount of its financing from bond proceeds to fund loans for the purchase of homes where the purchaser will be the first occupant, or for substantial rehabilitation. As used in this chapter, “substantial rehabilitation” means rehabilitation in which the costs of rehabilitation equal or exceed 20 percent of the value of the structure after rehabilitation.

(2) Paragraph (1) does not apply to an issue of bonds for which all of the proceeds of the bond issuance are allocated to fund loans for home improvement or substantial rehabilitation.

(3) Paragraph (1) shall not apply to that portion of the proceeds of any bonds issued to finance home mortgages for first-time homebuyers.

(g) The City of Gardena shall require each mortgagor under the program to certify his or her intention to occupy the home for a minimum of two years after receiving a home mortgage, with appropriate exceptions in hardship cases determined by the City of Gardena.

(h) The City of Gardena may do any and all things necessary to carry out the purposes and exercise the powers expressly granted by this part.

history: (History: Added by Stats. 1990, Ch. 1297, Sec. 5.)


text: A home financing program authorized by this part shall not be implemented unless the program complies with the land use element and the housing element which is required to be included in the general plan of the city or county by Section 65302 of the Government Code.


text: Notwithstanding Section 711 of the Civil Code, any indebtedness incurred pursuant to a mortgage financed under the terms of this part shall be subject to acceleration and the balance owing declared immediately due and payable upon the sale of the home to a purchaser who does not meet the required qualifications for borrowers of subdivision (f) of Section 52020 or any more stringent qualifications as the city or county may require.

history: (History: Amended by Stats. 1980, Ch. 466.)


text: In providing financing for home mortgages pursuant to this part, a lending institution shall incur no liability in any part based on any policy or procedure which has been adopted by the city or county unless it is contained in the contract between the lending institution and the city or county, its officers, agents or trustees.


text:
For purposes of this part, a city or county shall have the following powers:

(a) To issue its bonds to defray, in whole or in part, (1) the costs of acquiring home mortgages or making loans to lending institutions in order to enable them to make home mortgages, (2) the costs of studies and surveys, insurance premiums, underwriting fees, legal, accounting and marketing services incurred in connection with the issuance and sale of bonds, including bond and mortgage reserve accounts; and trustee, custodian and rating agency fees, and (3) such other costs as are reasonably related to the foregoing.

(b) To sell or otherwise dispose of any home mortgages, in whole or in part, or to loan sufficient funds to any person to defray, in whole or in part, the costs of purchasing home mortgages, so that the revenues and receipts to be derived with respect to the home mortgages, together with any insurance proceeds, reserve accounts and earnings thereon, shall be designed to produce revenues and receipts at least sufficient to provide for the prompt payment at maturity of principal, interest and redemption premiums, if any, upon all bonds issued to finance such costs.

(c) To pledge any revenues and receipts to be received from or with respect to any home mortgages or loans made to lending institutions pursuant to this part to the punctual payment of bonds authorized under this part, and the interest and redemption premiums, if any, thereon.

(d) To mortgage, pledge, assign, or grant security interests in any home mortgages, notes, loans made to lending institutions pursuant to this part, or other property in favor of the holder or holders of bonds issued therefor or the trustee for such holder or holders.

(e) To sell and convey any home mortgages or loans made to lending institutions pursuant to this part, for such prices and at such times as the governing body of the city or county may determine.

(f) To issue its bonds to refund previously issued bonds in whole or in part at any time.

(g) To make and execute contracts and other instruments necessary or convenient to the exercise of any of the powers granted herein.

chapter: 4. Revenue Bonds

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 4. Revenue Bonds


text: The exercise of any or all powers granted by this part shall be authorized and the bonds shall be authorized to be issued under this part for the purposes set forth in this part, by resolution or ordinance of the governing body of the city or county which shall take effect immediately upon adoption. Any such resolution or ordinance shall set forth a finding and declaration (1) of the public purpose therefor and (2) that such resolution or ordinance is being adopted pursuant to the powers granted by this part. The finding and declaration shall be conclusive evidence of the existence and sufficiency of the public purpose and powers.


text: The bonds shall bear interest at such rate or rates, may be payable at such times, may be in one or more series, may bear such date or dates, may mature at such time or times not exceeding 45 years from their respective dates, may be payable in such medium of payment at such place or places, may carry such registration privileges, may be subject to such terms of redemption at such premiums, may be executed in such manner, may contain such terms, covenants and conditions and may be in such form, either coupon or registered, as the resolution authorizing the bonds may provide. The bonds may be sold at public or private sale in such manner and upon such terms as may be provided in such resolution or by separate resolution. Pending the preparation of definitive bonds, interim receipts or certificates in such form and with such provisions as may be provided in such resolution, may be issued to the purchaser or purchasers of bonds sold pursuant to this part. The bonds and interim receipts or certificates shall be deemed to be securities and negotiable instruments within the meaning and for all purposes of the Uniform Commercial Code of this state, subject to the provisions for registration thereof contained in such resolution.


text:
Any resolution authorizing the issuance of the bonds may contain covenants as to (1) the use and disposition of the revenues and receipts from or with respect to any home mortgages or loans to lending institutions for which the bonds are to be issued, including the creation and maintenance of reserves, (2) any insurance to be carried on any home, home mortgage or bonds and the use and disposition of insurance moneys, (3) the appointment of one or more banks or trust companies within or outside the state having the necessary trust powers as trustee, custodian, or trustee and custodian for the benefit of the bondholders, paying agent, or bond registrar, (4) the investment of any funds held by such trustee or custodian, (5) the maximum interest rate payable on any home mortgage, and (6) the terms and conditions upon which the holders of the bonds or any portion thereof, or any trustees therefor, are entitled to the appointment of a receiver by a court of competent jurisdiction, and which may provide that the receiver may take possession of the home mortgages, or any part thereto, and maintain, sell or otherwise dispose of such mortgages, prescribe other payments and collect, receive and apply all income and revenues thereafter arising therefrom.

Any resolution authorizing the issuance of bonds may provide that the principal or redemption price of, and interest on, the bonds shall be secured by a mortgage, pledge, assignment, security interest, insurance agreement or indenture of trust covering such home mortgages or loans to lending institutions for which the bonds are issued and may include any improvements or extensions thereafter made. Such mortgage, pledge, assignment, security interest, insurance agreement or indenture of trust may contain such covenants and agreements to properly safeguard the bonds as may be provided for in the resolution authorizing such bonds and shall be executed in the manner as may be provided for in the resolution. The provisions of this part and any such resolution and any such mortgage, pledge, assignment, security interest, insurance agreement, or indenture of trust shall constitute a contract with the holder or holders of the bonds and continue in effect until the principal of, the interest on, and the redemption premiums, if any, on the bonds so issued have been fully paid or provision made therefor, and the duties of the issuing city or county and its agencies and officers under this part and any such resolution and any such mortgage, pledge, assignment, security interest, insurance agreement, or indenture of trust shall be enforceable as provided therein by any bondholder by mandamus, foreclosure of any such mortgage, pledge, assignment, security interest, insurance agreement, or indenture of trust or other appropriate suit, action or proceeding in any court of competent jurisdiction; provided, the resolution or any mortgage, pledge, assignment, security interest, insurance agreement, or indenture of trust under which the bonds are issued may provide that all such remedies and rights to enforcement may be vested in a trustee (with full power of appointment) for the benefit of all the bondholders, and that the trustee shall be subject to the control of such number of holders or owners of any outstanding bonds as specified in the resolution.


text: The bonds shall bear the manual or facsimile signatures of such officers of the issuing city or county as may be designated in the resolution authorizing the bonds and such signatures shall be the valid and binding signatures of the officers of the city or county, notwithstanding that before the delivery thereof and payment therefor any or all of the persons whose signatures appear thereon have ceased to be officers of the city or county. The validity of the bonds shall not be dependent on, nor affected by, the validity or regularity of any proceedings relating to the home mortgages for which the bonds are issued. The resolution authorizing the bonds may provide that the bonds shall contain a recital that they are issued pursuant to this part, and the recital shall be conclusive evidence of their validity and of the regularity of their issuance.


text: Bonds issued under this part may be secured by a pledge of, or lien upon the revenues and receipts derived from or with respect to the home mortgages or from or with respect to any notes or other obligations of lending institutions with respect to which the bonds have been issued, and the governing body of the issuing city or county may provide in the resolution authorizing such bonds for the issuance of additional bonds to be equally and ratably secured by a lien upon such revenues and receipts.


text: Any pledge made to secure bonds shall be valid and binding from the time when the pledge is made. The revenues and receipts or property or interests in property pledged and thereafter received by the issuing city or county, trustee or custodian shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against such city or county, trustee or custodian, irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded.


text: All bonds issued pursuant to this part shall be limited obligations of the city or county issuing the same, payable solely out of the revenues and receipts derived from or with respect to the home mortgages or from or with respect to any notes or other obligations of lending institutions with respect to which the bonds are issued. No holder of any bonds issued under this part has the right to compel any exercise of the taxing power of a city or county to pay the bonds, the interest or redemption premium, if any, thereon, and the bonds shall not constitute an indebtedness of the issuing city or county or a loan of credit thereof within the meaning of any constitutional or statutory provision, nor shall the bonds be construed to create any moral obligation on the part of the issuing city or county or any agency or subdivision thereof with respect to the payment of such bonds. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this part and that it does not constitute an indebtedness of the city or county issuing the bond or a loan of credit thereof within the meaning of any constitutional or statutory provisions.


text: Neither the members of the governing body of a city or county, nor any official or employee of a city or county, nor any person executing bonds issued under this part shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the issuance thereof.


text: Any property or interests in property held by or on behalf of a city or county pursuant to the provisions of this part and any bonds issued under the provisions of this part, their transfer and the income therefrom, shall at all times be free from taxation of every kind by the state and city or county, or other political subdivision of the state, except inheritance and gift taxes.


text: Notwithstanding any other provision of law, bonds issued pursuant to this part shall be legal investments for all trust funds, insurance companies, savings and loan associations, investment companies and banks, both savings and commercial, and shall be legal investments for executors, administrators, trustees and all other fiduciaries. Such bonds shall be legal investments for state school funds and for any funds which may be invested in county, municipal or school district bonds, and such bonds shall be deemed to be securities which may properly and legally be deposited with, and received by, any state or municipal officer or by any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now, or may hereafter, be authorized by law, including deposits to secure public funds.


text: An action may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure and any other applicable laws of the state to determine the validity of any issuance or proposed issuance of bonds under this part and the legality and validity of all proceedings previously taken or proposed in a resolution of a county or city to be taken for the authorization, issuance, sale and delivery of the bonds and for the payment of the principal thereof and interest thereon.


text: A city or county which has issued bonds pursuant to this part or any trustee or custodian on behalf of the city or county, may invest any funds held by it as provided in the resolution authorizing the issuance of the bonds.


text:
Investments under Section 52042 may include mortgage obligations on single-family dwellings purchased from a state or federally chartered savings and loan association pursuant to a repurchase agreement under which the bank or savings and loan association will repurchase the mortgage obligation on or before a specified date and for a specified amount, provided that the mortgage or the repurchase agreement shall be insured by a mortgage insurance company licensed to insure mortgages in the State of California and qualified to provide insurance on mortgages purchased by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

The authority provided in this section and Section 52042 is additional and alternative to any other authorization for investment contained in this part, including Section 52044, or in other provisions of law.

history: (History: Added by Stats. 1980, Ch. 331.)


text: All moneys received pursuant to the provisions of this part, whether revenues or proceeds from the sale of revenue bonds or proceeds of mortgage insurance or guarantee claims, shall be deemed to be trust funds to be held and applied solely for the purposes of this part. Any bank or trust company in which such moneys are deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes specified in this part, subject to the terms of the resolution authorizing the revenue bonds.


text:
A city or county may provide for the issuance of the revenue bonds of the city or county for the purpose of refunding any revenue bonds of the city or county then outstanding, including the payment of any redemption premiums thereof and any interest accrued or to accrue to the earliest or subsequent date of redemption, purchase, or maturity of such bonds, and, if deemed advisable by the city or county, for the additional purpose of paying all or any part of the cost of additional residential construction.

The proceeds of revenue bonds issued pursuant to this section may, in the discretion of the city or county, be applied to the purchase or retirement at maturity or redemption of outstanding revenue bonds, either at their earliest or any subsequent redemption date or upon the purchase or retirement at the maturity thereof and, pending such application, that portion of the proceeds allocated for such purpose may be placed in escrow, to be applied to such purchase or retirement at maturity or redemption on such date, as may be determined by the city or county. Pending use for purchase, retirement at maturity, or redemption of outstanding revenue bonds, any proceeds held in such an escrow may be invested and reinvested as provided in the resolution authorizing the issuance of the refunding bonds. Any interest or other increment earned or realized on any such investment may also be applied to the payment of the outstanding revenue bonds to be refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of such proceeds and any interest or increment earned or realized from the investment thereof may be returned to the city or county to be used by it for any lawful purpose under this part. That portion of the proceeds of any revenue bonds issued pursuant to this section which is designated for the purpose of paying all or any part of the cost of additional residential construction may be invested and reinvested in obligations of, or guaranteed by, the United States of America or in certificates of deposit or time deposits secured by obligation of, or guaranteed by, the United States of America, maturing not later than the time or times when such proceeds will be needed for the purpose of paying all or any part of such cost.

All revenue bonds issued pursuant to this section shall be subject to the provisions of this part in the same manner and to the same extent as other bonds issued pursuant to this part.


text: The provisions of Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code shall not apply to a mortgagor of any home acquired by foreclosure, trust deed, sale or other proceeding resulting from default on a home mortgage made by a county or city or by a lending institution pursuant to this part.

chapter: 5. Miscellaneous Provisions

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 5. Miscellaneous Provisions


text: This part is necessary for the health, welfare and safety of the state, its counties and cities and its inhabitants. Therefore, it shall be liberally construed to effect its purposes.


text:
(a) Except as provided in subdivision (b), the powers conferred by this part are in addition and supplemental to, and the limitations imposed by this part shall not affect the powers conferred by, any other law.

(b) The Legislature finds and declares that the market for municipal home mortgage revenue bonds is limited and that, as a matter of overriding state policy, issuances of such bonds should be limited to financing housing for persons whose housing needs are least satisfied by conventional mortgage financing and other governmental home ownership assistance programs. This part contains appropriate limitations with respect to mortgagor income and also contains provisions which will assist in assuring that no bond issuance under this part will result in any impairment of the public credit in this state.

Therefore, this part shall be the exclusive authority for issuance of revenue bonds by any city, including any charter city, county, or city and county for the purpose of providing long-term mortgage financing for the construction or acquisition of housing, excluding multifamily rental housing and multifamily cooperative housing; provided, that nothing in this subdivision shall supersede any other provision of state law authorizing the provision of long-term mortgage financing by any state agency or local public entity; and provided further, that nothing in this subdivision shall affect, or be in any way applicable to, revenue bonds issued (and loans made with the proceeds thereof) by the Cities of San Bernardino, Burbank, or Pasadena on or before July 1, 1980, the interest on which would be excludable from the gross income of the recipients by reason of the applicable laws of the United States and the regulations promulgated thereunder in effect at the time such revenue bonds are issued, or by any other charter city on or before February 1, 1980, the interest on which would be excludable from the gross income of the recipients by reason of Section 4(b) of the proposed Mortgage Subsidy Bond Tax Act of 1979, as reported by the Committee on Ways and Means of the United States House of Representatives on August 31, 1979. Furthermore, nothing in this subdivision shall affect the authority conferred upon a charter city by its charter to issue revenue bonds to undertake a program of long-term mortgage financing of multifamily rental housing.

(c) Home mortgages may be acquired, purchased, and financed, and bonds may be issued under this part for purposes of this part, notwithstanding that any other law or resolution may provide for the acquisition, purchase, and financing of like home mortgages, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitations, or other provisions contained in any other law or resolution.


text:
Notwithstanding subdivision (b) of Section 52053 or any of the limitations of this part:

(a) A charter city having seven community development districts established for purposes of Section 105(a)(8) of Public Law 93-383, as amended, and which, prior to February 1, 1980, issued revenue bonds to finance mortgage loans on homes, may issue not more than thirty-three million dollars ($33,000,000) of additional revenue bonds pursuant to local ordinance to make or purchase mortgage loans on homes as defined in Section 52012, subject to the following conditions:

(1) For mortgage loans on homes located within such a community development district, the income of a purchaser shall not exceed 150 percent of the median income within the city.

(2) For a home located outside of a community development district, the income of a purchaser shall not exceed 120 percent of the city’s area median income.

(3) The maximum loan amount for homes undergoing rehabilitation in connection with financing pursuant to this subdivision shall not exceed the median purchase price of a home in the city.

(b) A city and county may issue not more than sixty million dollars ($60,000,000) of revenue bonds pursuant to local ordinance for the purpose of financing the purchase of residential housing units under the following conditions:

(1) The proceeds of the bonds will be used in combination with subsidy moneys made available through grant programs such as the Urban Development Action Grant, the Community Development Block Grant or other federal, state, local, or private moneys to finance the purchase of residential housing under an ownership or financing arrangement which provides for the sharing of equity appreciation between one or more occupants of each property and the city and county (or an entity acting on its behalf).

(2) The revenue bonds and subsidy moneys shall provide for the following:

(A) At least 50 percent of the participants of the program shall be lower income households, as defined in Section 50079.5, unless after the date six months after the date of issuance of the bonds the city and county makes a written finding that this requirement cannot be achieved in spite of the diligent efforts of the city and county and because of the limited availability of subsidy moneys, in which case at least 25 percent of the participants of the program shall be lower-income households.

(B) In no case shall participants of the program be persons and families whose incomes are more than 150 percent of the area medium income.

(C) Not less than 30 percent of the residential housing units financed pursuant to this subdivision shall be units where the participant in the program is the first occupant or units which are being substantially rehabilitated. As used in this subparagraph, “substantial rehabilitation” means rehabilitation in which the costs of rehabilitation equal or exceed 20 percent of the value of the structure after rehabilitation.

However, the requirements of this paragraph may be modified by the city and county, as necessary to meet the conditions of approval of the United States Department of Housing and Urban Development.

(c) Notwithstanding any other provision of law, bonds issued pursuant to this section shall be legal investments for all trust funds, insurance companies, savings and loan associations, investment companies and banks, both savings and commercial, and shall be legal investments for executors, administrators, trustees and all other fiduciaries. Such bonds shall be legal investments for state school funds and for any funds which may be invested in county, municipal, or school district bonds, and such bonds shall be deemed to be securities which may properly and legally be deposited with, and received by, any state or municipal officer or by any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now, or may hereafter be authorized by law, including deposits to secure public funds.

(d) It is not the intent of the Legislature in enacting this section to change the provisions of this part, but only to continue programs relating to the goals of this part and to prevent loss of commitments for Urban Development Action Grants.

history: (History: Amended by Stats. 1983, Ch. 478, Sec. 8. Effective July 28, 1983.)


text: If any provision of this part or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the part which can be given effect without the invalid provision or application, and to this end the provisions of this part are severable.


text: This chapter constitutes an alternative method for cities and counties to issue revenue bonds for providing home mortgages pursuant to the provisions of Chapters 1 (commencing with Section 52000) to 5 (commencing with Section 52051), inclusive.

history: (History: Added by Stats. 1980, Ch. 1141.)

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 6. California Housing Finance Agency Assistance in Issuing City and County Revenue Bonds for Home Mortgages


text: The agency, and any city or county, or a city and a county, may enter into an agreement which provides that the agency sell bonds on behalf of any such city or county, or for such city and such county, for the purpose of providing funds for home mortgages.

chapter: 6. California Housing Finance Agency Assistance in Issuing City and County Revenue Bonds for Home Mortgages


text:
Any agreement made pursuant to Section 52061 shall contain provisions doing all of the following:

(a) Limiting the maximum amount of bonds to be issued by a city or county.

(b) Requiring that the city, or county, or each city and county that is a party to the agreement, not issue additional bonds for home mortgage loans within a period of three years from the date of the bonds issued pursuant to the agreement, or until all of the proceeds of those bonds have been used to make home mortgage loans, without the express written consent of the agency.

(c) Requiring that all bonds and any prospectus in connection with those bonds contain a legend condition to the following effect: “Neither the faith and credit of the State of California or the agency nor the taxing power of the state is pledged to the payment of principal or interest on this bond.”

(d) Requiring agency approval of the bond counsel of the city or county, or the bond counsel of each city and county that is a party to the agreement.

(e) Designating, consistent with the agency’s program for financing residential structures of four units or less authorized by Article 2 (commencing with Section 51125) of Chapter 5 of Part 3 and the regulations adopted pursuant thereto, maximum sales prices of homes, maximum loan amounts for home mortgages involving rehabilitation and refinancing, borrower eligibility criteria, geographic areas where loans can be made, insurance requirements, the minimum percentage of bond proceeds to be utilized for home mortgages involving new construction and rehabilitation and the amount to be allocated to a bond reserve fund.

history: (History: Amended by Stats. 1996, Ch. 833, Sec. 14. Effective January 1, 1997.)


text:
Any agreement pursuant to Section 52061 may provide any or all of the following:

(a) That the agency will provide, either directly or through agency approved lending institutions, for the origination and servicing of home mortgage loans.

(b) For the payment of fees and expenses in connection with the issuing of bonds.

(c) For any matter described in Section 51355 relating to agency bonds.


text: Subject only to the other provisions of this chapter and to any agreement between the agency and city or county, the provisions of Chapter 4 (commencing with Section 52030) shall be applicable to any issuer and to any bonds issued pursuant to the authority of this chapter.


text: Bonds issued pursuant to this chapter shall not be deemed issues of the agency for any purpose, including being counted within any calculation of the agency’s bonding authority limitations now or hereafter established by law.


text: Bonds of more than one city or county may be pooled for purposes of issuance and bond proceeds, reserved or other security for the bonds, including, but not limited to, loan or loan participation, made or derived from bond proceeds, may likewise be pooled to secure the issuance of any such bonds.


text:
(a) Subject to the limitations of this chapter, any city or county may, in addition to any other power conferred by this part, issue revenue bonds as provided in Chapter 4 (commencing with Section 52030) for the purpose of financing the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing and for the provision of capital improvements in connection with and determined necessary to that multifamily rental housing.

(b) For this purpose, the term “home mortgage,” as used in Chapter 4 (commencing with Section 52030), and as defined by Section 52013, shall be further defined to include construction loans and mortgage loans to housing sponsors to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing and for the provision of capital improvements in connection with and determined necessary to the multifamily rental housing.

(c) To the extent possible, Chapter 4 (commencing with Section 52030) shall be construed in a manner that enables a city or county to comply with the purpose and requirements of this chapter.

history: (History: Added by Stats. 2002, Ch. 12, Sec. 1. Effective March 11, 2002.)

chapter: 7. Multifamily Rental Housing

article: 1. Financing

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 7. Multifamily Rental Housing > 1. Financing


text: As used in this chapter, “city or county” includes any city and county.

history: (History: Amended by Stats. 2003, Ch. 62, Sec. 189. Effective January 1, 2004.)

article: 1. Financing


text: Subject to the limitations prescribed in this chapter, a city or county may make, or undertake commitments to make, construction loans and mortgage loans to housing sponsors to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing. For this purpose, the city or county shall enter into regulatory contracts and other agreements with housing sponsors receiving loans under this chapter to assure all requirements of this chapter are satisfied.

article: 1. Financing


text: Subject to the limitations prescribed in this chapter, a city or county may purchase, or undertake, directly or indirectly through lending institutions, commitments to purchase, construction loans and mortgage loans originated in accordance with a financing agreement with the city or county to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing and may make loans to lending institutions under terms and conditions which, in addition to other provisions determined by the city or county, shall require the lending institutions to use the net proceeds of the loans for the making, directly or indirectly, of construction loans or mortgage loans to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing.

article: 1. Financing


text: For the purposes of this chapter, a city or county shall have the power to issue its bonds to defray, in whole or in part, the costs of studies and surveys, insurance premiums, underwriting fees, legal, accounting, and marketing services incurred in connection with the issuance and sale of bonds, including bond and mortgage reserve accounts; trustee, custodian, and rating agency fees, and any other costs which are reasonably related to the foregoing.

article: 1. Financing


text:
A city or county may, in conjunction with the financing of multifamily rental housing pursuant to this chapter, finance the acquisition, construction, rehabilitation, refinancing, or development of commercial property for lease, subject to all of the following conditions:

(a) No more than 10 percent of the proceeds of any revenue bonds issued pursuant to this chapter may be used to develop the commercial property for lease.

(b) The commercial property developed will be located on the same parcel or on a parcel adjacent to a multifamily rental housing development.

(c) As a condition of the financing, any lease payments collected in excess of payments necessary for debt service, operating expenses and any required reserves related to that property, shall be used to reduce rents on units reserved for occupancy by lower income households and very low income households in a multifamily rental housing development.

article: 1. Financing


text:
(a) (1) A multifamily rental housing development financed, or for which financing has been extended or committed pursuant to this chapter from the proceeds of sale of each bond issue, shall at all times during the qualified project period meet the requirement of subparagraph (A) or (B), whichever is elected by the issuer at the time of issuance of the issue for each development:

(A) Twenty percent or more of the residential units in the development shall be occupied by individuals whose income is 50 percent or less of area median income.

(B) Forty percent or more of the residential units in the development shall be occupied by individuals whose income is 60 percent or less of area median income.

As used in this section, “qualified project period,” “income,” and “area median income” shall have the meanings specified in, and shall be determined in accordance with the provisions of, subsection (d) of Section 142 of the Internal Revenue Code of 1986, as amended, and United States Treasury regulations and rulings promulgated pursuant thereto.

With respect to a development for which the issuer has elected to meet the requirement of subparagraph (A), the rental payments paid by the occupants of the units meeting the requirement of subparagraph (A) (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those occupants or on behalf of those units) shall not exceed 30 percent of 50 percent of area median income. With respect to a development for which the issuer has elected to meet the requirement of subparagraph (B), the rental payments paid by the occupants of the units meeting the requirement of subparagraph (B) (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those occupants or on behalf of those units) shall not exceed 30 percent of 60 percent of area median income.

(2) The governing body shall ensure that the local agency issuing permits for the acquisition, construction, rehabilitation, refinancing, or development of the multifamily rental housing development shall consider opportunities to contribute to the economic feasibility of the units and to the provision of units for very low income households through concessions and inducements including, but not limited to, the following:

(A) Reductions in construction and design requirements.

(B) Reductions in setback and square footage requirements and the ratio of vehicular parking spaces that would otherwise be required.

(C) Granting density bonuses.

(D) Providing expedited processing of permits.

(E) Modifying zoning code requirements to allow mixed use zoning.

(F) Reducing or eliminating fees and charges for filing and processing applications, petitions, permits, planning services, water and sewer connections, and other fees and charges.

(G) Reducing or eliminating requirements relating to monetary exactions, dedications, reservations of land, or construction of public facilities.

(H) Other financial incentives or concessions for the multifamily rental housing development which result in identifiable cost reductions, as determined by the governing body. The governing body shall ensure that the local agency issuing permits for the development considers its responsibilities under this section and makes a good faith effort to enhance the feasibility of the project and to provide housing for lower income households and very low income households.

(3) The governing body shall not permit a selection criteria to be applied to certificate holders under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f) that is more burdensome than the criteria applied to all other prospective tenants.

(4) It is the intent of the Legislature that the governing body finance projects that assist in meeting the urgent need for providing shelter for lower income households, very low income households, and persons and families of low or moderate income. To that end, the quality of materials and the amenities provided should not be excessive so as to hinder the prospect of achieving the stated goal.

(5) It is the intent of the Legislature that the governing body finance projects that assist in meeting the urgent need for providing housing for families. To that end, developments with three- and four-bedroom units affordable to larger families shall have priority over competing developments.

(b) As a condition of financing pursuant to this chapter, the housing sponsor shall enter into a regulatory agreement with the city or county providing that units reserved for occupancy by lower income households remain available on a priority basis for occupancy until the bonds are retired. As a condition of financing provided by bonds issued on or after January 1, 1991, the housing sponsor shall enter into a regulatory agreement with the city or county providing that units reserved for occupancy by lower income households remain available on a priority basis for occupancy for the qualified project period. The regulatory agreement shall contain a provision making the covenants and conditions of the agreement binding upon successors in interest of the housing sponsor. The regulatory agreement shall be recorded in the office of the county recorder of the county in which the multifamily rental housing development is located. The regulatory agreement shall be recorded in the grantor-grantee index to the name of the property owner as grantor and to the name of the city or county as grantee.

(c) The governing body shall ensure that units occupied by lower income households are of comparable quality and offer a range of sizes and number of bedrooms comparable to the units that are available to other tenants.

(d) (1) The city or county shall give priority to processing construction loans and mortgage loans or may take other steps such as reducing loan fees or other local fees for multifamily rental developments which incorporate innovative and energy-efficient techniques that reduce development or operating costs and that have the lowest feasible per unit cost, as determined by the city or county, based on efficiency of design or the elimination of improvements that are not required by applicable building standards.

(2) The city or county shall give equal priority to processing construction loans and mortgage loans or may take other steps such as reducing loan fees or other local fees on multifamily rental housing developments that do any of the following:

(A) Utilize federal housing or development assistance.

(B) Utilize redevelopment funds or other local financial assistance, including, but not limited to, contributions of land.

(C) Are sponsored by a nonprofit housing organization.

(D) Provide a significant number of housing units, as determined by the city or county, as part of a coordinated jobs and housing plan adopted by the city or county.

(E) Exceeds the ratios specified in subparagraph (A) or (B) of paragraph (1) of subdivision (a) or restricts the occupancy for these units for the longest period beyond the required minimum number of years.

(e) (1) New and existing rental housing developments may be syndicated after prior written approval of the governing body. The governing body shall grant that approval only after the city or county determines that the terms and conditions of the syndication comply with this section.

(2) The terms and conditions of the syndication shall not reduce or limit any of the requirements of this chapter or regulations adopted or documents executed pursuant to this chapter. No requirements of the city or county shall be subordinated to the syndication agreement. A syndication shall not result in the provision of fewer assisted units, or the reduction of any benefits or services, than were in existence prior to the syndication agreement.

(f) At the option of the city or county, the amendments to this subdivision made by Chapter 907 of the Statutes of 1983 may be made applicable to any multifamily rental housing development financed by the issuance, on or after September 3, 1982, of bonds authorized by this chapter.

(g) Following the expiration or termination of the qualified project period, except in the event of foreclosure and redemption of the bonds, deed in lieu of foreclosure, eminent domain, or action of a federal agency preventing enforcement, units required to be reserved for occupancy pursuant to subdivision (a) and financed or refinanced with proceeds of bonds issued pursuant to this section on or after January 1, 1991, or refinanced with the proceeds of bonds issued pursuant to Section 53583 of the Government Code or any charter city authority on or after January 1, 2007, shall remain available to any eligible household occupying a reserved unit at the date of expiration or termination, at a rent not greater than the amount set forth by subdivision (a), until the earliest of any of the following occur:

(1) The household’s income exceeds 140 percent of the maximum eligible income specified in subdivision (a).

(2) The household voluntarily moves or is evicted for “good cause.” “Good cause” for the purposes of this section, means the nonpayment of rent or allegation of facts necessary to prove major, or repeated minor, violations of material provisions of the occupancy agreement which detrimentally affect the health and safety of other persons or the structure, the fiscal integrity of the development, or the purposes or special programs of the development.

(3) Thirty years after the date of the commencement of the qualified project period.

(4) The sponsor pays the relocation assistance and benefits to tenants as provided in subdivision (b) of Section 7264 of the Government Code.

(5) The amendment to this subdivision made during the 2005-06 Regular Session of the Legislature is declaratory of existing law.

(h) During the three years prior to expiration of the qualified project period, the sponsor shall continue to make available to eligible households reserved units that have been vacated to the same extent that nonreserved units are made available to noneligible households.

(i) This section shall not be construed to require a city or county to monitor the sponsor’s compliance with the provisions of subdivision (g).

(j) The requirements of subdivisions (g) to (i), inclusive, shall be contained in a regulatory agreement required pursuant to subdivision (b).

(k) Notwithstanding Section 1461 of the Civil Code, the provisions of this section shall run with the land and may be enforced either in law or in equity by any resident, local agency, entity, or by any other person adversely affected by an owner’s failure to comply with this section.

history: (History: Amended by Stats. 2006, Ch. 890, Sec. 18. Effective January 1, 2007.)

article: 1. Financing


text:
(a) (1) When refunding revenue bonds for multifamily housing which were previously issued pursuant to Section 52080, the city, county, or city and county shall ensure that rental units required, by this chapter or by applicable federal law at the time the original bonds were issued, to be reserved for occupancy for low- and very low income households shall remain occupied by, or made available to, those persons at least until the later of the following:

(A) The date originally so required.

(B) As long as any bonds remain outstanding with respect to the development.

(2) For bonds previously issued to finance a development where all of the units, other than management units, are, at the time of the refunding, subsidized by a housing assistance payments contract for new construction and substantial rehabilitation pursuant to Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), subparagraph (B) of paragraph (1) shall refer to a period of time until the termination of the contract.

(b) The city, county, or city and county may determine that the period set forth in paragraph (1) of subdivision (a) shall not apply to the refunding of previously issued revenue bonds for which there is a mandatory redemption or acceleration as a result of default under the terms of the existing loan agreement or other security documents.

article: 1. Financing


text: For purposes of this article, “housing sponsor” means a person as defined in Section 52016.

article: 1. Financing


text: The primary purpose of this chapter is to meet the multifamily rental housing needs of persons and families of low or moderate income. The exercise of the powers granted by this division shall be in all respects for the benefit of the people of this state and for their health and welfare. Therefore, any bonds issued by a city, county, or city and county pursuant to this chapter, their transfer, and the income therefrom shall at all times be free from taxation by the state or any political subdivision or other instrumentality of the state, excepting inheritance and gift taxes.

article: 1. Financing


text: Two or more cities in the same county, or a county and one or more cities within the county, or two or more counties, may enter into an agreement to join or cooperate with one another in the exercise jointly, or otherwise, of any or all of their powers for the purpose of financing multifamily rental housing development pursuant to this chapter.

article: 1. Financing


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

article: 1. Financing


text: This article constitutes an alternative method for cities and counties to issue bonds for making construction loans and mortgage loans for multifamily rental housing developments pursuant to the provisions of this chapter.

article: 2. State Assistance

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 7. Multifamily Rental Housing > 2. State Assistance


text: The agency and any city or county may enter into an agreement which provides that the agency may sell bonds authorized pursuant to Chapter 4 (commencing with Section 52030) for the city or county and operate a program with the proceeds of the sale for the purpose of providing funds for construction loans and mortgage loans for multifamily rental housing developments within the city or county and for the provision of capital improvements in connection with and determined necessary to the multifamily rental housing.

article: 2. State Assistance


text:
Any agreement made pursuant to Section 52090.5 shall contain all of the following provisions:

(a) Limitations on the maximum amount of bonds to be issued by a city or county.

(b) A requirement that all bonds and any prospectus in connection with the bonds contain a legend condition to the following effect: “Neither the faith and credit of the State of California or the agency nor the taxing power of the state is pledged to the payment of principal or interest on this bond.”

(c) A requirement that the agency approve the bond counsel selected by the city or county.

(d) The designation of criteria for multifamily rental housing developments eligible for financing; the number of units which shall be available for occupancy by persons of low income, which shall not be less than 20 percent of the total units; the amount to be allocated to a bond reserve fund; and, any other matters which the agency finds necessary or desirable.

(e) That the agency shall make construction loans and mortgage loans for multifamily rental housing developed within the city or county.

(f) That the agency shall supervise all construction and management of multifamily rental housing developments financed pursuant to this chapter on behalf of the city or county, and with the same powers and duties under this chapter, to ensure that all requirements of this part are met.

article: 2. State Assistance


text: Bonds issued pursuant to this article shall not be deemed bonds of the agency for the purposes of any limitations contained in Section 51350.

article: 2. State Assistance


text: The agency shall adopt uniform regulations for administration of local programs under this article. Local programs conducted by the agency under this article shall be administered in a manner consistent with this chapter.

article: 2. State Assistance


text:
Whenever a complaint is received concerning a violation of the restrictions imposed pursuant to Section 52080, the city or county shall investigate promptly and make a report to the complaining party on whether the violation existed and whether it persists, and if it persists, what action the city or county will take to remedy the violation. When the city or county determines that a violation exists, whether determined upon an investigation of a complaint or on its own motion, the city or county shall take all appropriate action, including necessary legal action, to promptly eliminate the violation.

Notwithstanding any provision of this section, any person aggrieved by a violation may seek a judicial remedy without regard to whether a complaint has been made to the city or county or whether the city or county is then taking any action to remedy the violation.

article: 3. Miscellaneous

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 7. Multifamily Rental Housing > 3. Miscellaneous


text: Except as otherwise provided in this article, this chapter shall not be construed to limit or otherwise restrict the authority of chartered cities to issue bonds for the purpose of financing the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing or for the provision of capital improvements in connection with and determined necessary to that multifamily rental housing. For purposes of this article, certificates of participation in any form of obligation of a city, county, or city and county shall be considered to be bonds.

article: 4. Application to Chartered Cities

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 7. Multifamily Rental Housing > 4. Application to Chartered Cities


text:
(a) Multifamily rental housing development financed, or for which financing has been extended or committed, pursuant to this chapter from the proceeds of sale of each bond issue shall at all times during the qualified project period meet the requirement of paragraph (1) or (2), whichever is elected by the issuer at the time of issuance of the issue for each development:

(1) Twenty percent or more of the residential units in the development shall be occupied by individuals whose income is 50 percent or less of area median income.

(2) Forty percent or more of the residential units in the development shall be occupied by individuals whose income is 60 percent or less of area median income.

As used in this subdivision, “qualified project period,” “income,” and “area median income” shall have the meanings specified in, and shall be determined in accordance with the provisions of, subsection (d) of Section 142 of the Internal Revenue Code of 1986, as amended, and United States Treasury regulations and rulings promulgated pursuant thereto.

(b) With respect to a development for which the issuer has elected to meet the requirement of paragraph (1) of subdivision (a), the rental payments paid by the occupants of the units meeting the requirement of paragraph (1) of subdivision (a) (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those occupants or on behalf of those units) shall not exceed 30 percent of 50 percent of area median income.

(c) With respect to a development for which the issuer has elected to meet the requirement of paragraph (2) of subdivision (a), the rental payments paid by the occupants of the units meeting the requirement of paragraph (2) of subdivision (a) (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those occupants or on behalf of those units) shall not exceed 30 percent of 60 percent of area median income.

article: 4. Application to Chartered Cities


text:
Each city, county, and city and county that has issued bonds pursuant to this chapter or a charter provision or ordinance for the purposes specified in Section 52097 shall file a report annually, on or before March 1, with the Governor, the Legislature, and the department, which report shall include all of the following information:

(a) The total amount of bonds issued by the city, county, or city and county pursuant to this chapter or another authority.

(b) The total number of units in multifamily rental housing developments financed pursuant to this chapter or another authority.

(c) The total number of units in multifamily rental housing developments reserved for occupancy on a priority basis for lower income households.

(d) The total number of units, if any, in a multifamily rental housing development reserved for occupancy on a priority basis for very low income households.

article: 4. Application to Chartered Cities


text: The Legislature hereby finds and declares that it would be beneficial to empower counties and cities to issue tax-exempt revenue bonds for the purpose of lending the proceeds to nonprofit organizations exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (26 U.S.C. Sec. 501(c)(3)), for the housing purposes specified in Section 52101.

history: (History: Added by Stats. 1988, Ch. 1610, Sec. 4.)

chapter: 8. Loans to Tax-Exempt Organizations

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 8. Loans to Tax-Exempt Organizations


text: A city or county may issue bonds to provide funds to be loaned by the city or county to nonprofit organizations exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (26 U.S.C. Sec. 501(c)(3)), for use by the organization to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing, including mobilehome parks that are or will be nonprofit or cooperatively-owned, or both, in which residents rent spaces and either rent or own the mobilehomes occupying these spaces, to provide housing within the territorial jurisdiction of the city or county in accordance with the organization’s tax-exempt purposes under that federal law. The bonds shall be issued so as to satisfy the requirements of Section 145 of the Internal Revenue Code of 1986, as amended (26 U.S.C. Sec. 145).

history: (History: Amended by Stats. 1996, Ch. 27, Sec. 9. Effective April 8, 1996.)


text:
(a) Occupancy and rent restrictions with respect to housing acquired pursuant to this chapter shall either meet the requirements of subparagraphs (A) and (B) of paragraph (1) or the requirements of paragraph (2), as follows:

(1) (A) Not less than 20 percent of the total number of units in a multifamily rental housing development financed, or for which financing has been extended or committed, pursuant to this chapter from the proceeds of the sale of bonds of each bond issuance of the city or county shall be for occupancy on a priority basis by lower income households, as defined by Section 50079.5. If a multifamily rental housing development is located within a targeted area project, as defined by Section 103(b)(12)(A) of Title 26 of the United States Code, not less than 15 percent of the total number of units financed, or for which financing has been extended or committed pursuant to this chapter, shall be for occupancy on a priority basis by lower income households. Not less than one-half of the units required for occupancy on a priority basis by lower income households shall be for occupancy on a priority basis for very low income households, as defined by Section 50105.

(B) (i) With respect to multifamily rental developments that are not mobilehome parks, the rental payments on the units required for occupancy by very low income households paid by the persons occupying the units (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to those persons or on behalf of those units) shall not exceed 30 percent of an amount equal to 50 percent of area median income. If the nonprofit organization elects to establish a base rent for all or part of the units for lower income households and very low income households, the base rents shall be adjusted for household size. In adjusting rents for household size for this purpose, it shall be assumed that one person will occupy a studio unit, two persons will occupy a one-bedroom unit, three persons will occupy a two-bedroom unit, four persons will occupy a three-bedroom unit, and five persons will occupy a four-bedroom unit.

(ii) With respect to mobilehome parks:

(I) Where a resident rents both the mobilehome and the space occupied by the mobilehome, for spaces and mobilehomes required for occupancy by very low income households, the total rental payments paid by the household on the mobilehome and the space occupied by the mobilehome (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to that household or on behalf of that space and mobilehome) shall not exceed 30 percent of an amount equal to 50 percent of the area median income, adjusted for household size as appropriate for the unit that occupies the space.

(II) Where a resident is the registered and legal owner of the mobilehome, is not making mortgage payments for the purchase of that mobilehome, and rents the space that the mobilehome occupies, for spaces and mobilehomes required for occupancy by very low income households, the total rental charge for occupancy of that space, excluding a reasonable allowance for other related housing costs determined at the time of acquisition of the mobilehome park by the nonprofit corporation, excluding any supplemental rental assistance from the state, the federal government, or any other public agency to that household on behalf of that space and mobilehome, shall not exceed 30 percent of 50 percent of the area median income, adjusted for household size as appropriate for the unit that occupies the space.

(III) Where a resident is the registered owner of the mobilehome, is making mortgage payments for the purchase of that mobilehome, and rents the space occupied by the mobilehome, for spaces and mobilehomes required for occupancy by very low income households, the rental charge for occupancy of a space by a mobilehome, exclusive of any charges for utilities and storage (excluding any supplemental rental assistance from the state, the federal government, or any other public agency to that household or on behalf of that space and mobilehome), shall not exceed 15 percent of 50 percent of the area median income, adjusted for household size as appropriate for the unit that occupies the space.

(IV) In adjusting rents for household size, either the occupancy standards established in clause (i) of subparagraph (B) of paragraph (1) of subdivision (a) or the alternative standards that assume that one person will occupy a recreational vehicle, two persons will occupy a single-wide mobilehome, and three persons will occupy a multisectional mobilehome may be utilized.

(2) The multifamily rental housing development is a “qualified low-income housing project,” within the meaning of Section 42(g) of the Internal Revenue Code (26 U.S.C. Sec. 42), because it meets the criteria set forth in Section 42(g)(1)(B) and (2) of the Internal Revenue Code.

(b) If at the time of acquisition any of the units or mobilehome spaces are occupied by ineligible households, that fact alone shall neither constitute a cause for the tenant’s eviction nor render the project ineligible. Upon vacation of any unit initially occupied by an ineligible household, that unit shall be rented to an eligible household until the required residency by eligible households is attained.

(c) As a condition of financing pursuant to this chapter, the nonprofit organization shall enter into a regulatory agreement with the city or county, which shall require that units reserved for occupancy by lower income households shall remain available on a priority basis for occupancy for the term of the bonds issued to provide the financing or 30 years, whichever is greater. The regulatory agreement shall contain a provision making the covenants and conditions of the agreement binding upon successors in interest of the nonprofit organization. The regulatory agreement shall be recorded in the office of the county recorder of the county in which the multifamily rental housing development is located. The regulatory agreement shall be recorded in the grantor-grantee index to the name of the property owner as grantor and to the name of the city or county as grantee.

history: (History: Amended by Stats. 1994, Ch. 379, Sec. 6. Effective January 1, 1995.)


text:
A city or county may, in conjunction with the financing of multifamily rental housing pursuant to this chapter, finance the acquisition of commercial property for lease, subject to all of the following conditions:

(a) No more than 10 percent of the proceeds of any revenue bonds issued pursuant to this chapter may be used to acquire the commercial property for lease.

(b) The commercial property acquired will be located on the same parcel or on a parcel adjacent to a multifamily rental housing development.

(c) As a condition of the financing, any lease payments collected in excess of payments necessary for debt service, operating expenses, and any required reserves related to such property, shall be used to reduce rents on units reserved for occupancy by lower income households and very low income households in a multifamily rental housing development.