California Code of Regulations
Title 25 - Housing and Community Development
Division 1 - Housing and Community Development
Chapter 7 - Department of Housing and Community Development Programs
Subchapter 15 - Rental Housing Construction Program-Proposition 84
Article 2 - Program Requirements
Section 8079 - Eligible Uses of Funds

Universal Citation: 25 CA Code of Regs 8079

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Funds shall be used only for approved eligible costs that are incurred on the project as set forth in this section. In addition, the costs must be necessary and must be consistent with the lowest reasonable cost consistent with the project's scope and area.

(b) Eligible categories of costs include the following:

(1) land acquisition;

(2) acquisition of projects under construction satisfying the requirements of section 8077(c);

(3) land lease payments;

(4) construction work;

(5) offsite improvements, such as sewers, utilities and streets, related to the rental housing development;

(6) onsite improvements related to the rental housing development;

(7) architectural, appraisal, engineering, legal and other consulting costs and fees, which are directly related to the planning and execution of the project and which are incurred through third-party contracts;

(8) administrative expenses pursuant to section 8085;

(9) rent-up costs;

(10) carrying costs during construction, including insurance, construction financing fees and interest, taxes, and any other expenses necessary to hold the property while the rental housing development is under construction;

(11) building permits and state and local fees;

(12) initial operating reserve balances required pursuant to section 8102;

(13) escrow, title insurance, recording and other related costs;

(14) costs for items intended to assure the completion of construction, such as contractor bond premiums; and

(15) environmental hazard reports, surveys, and investigations.

(c) Except where required to secure local government approvals essential to completion of the project, costs associated with the following items are ineligible for funding with program loan proceeds, and cannot be paid for from syndication proceeds or loans supported by rents from assisted units:

(1) building and roof shapes, ornamentation, and exterior finish schemes whose costs are in excess of the typical costs of these features in modestly designed rental housing;

(2) fireplaces, tennis courts, and similar amenities not typically found in modestly designed rental housing;

(3) shake and tile roofs, custom-made windows, ceramic tile floors and counters, hardwood floors, and similar features using materials not typically found in modestly designed rental housing, except where such materials have lower life-cycle costs due to lower operating, maintenance and replacement costs.

(d) No program funds shall be used for costs associated exclusively with nonassisted units or commercial space. If only a portion of the rental housing development consists of assisted units, the program loan amount shall not exceed the sum of the following:

(1) the costs of all items specified in subdivision (b) associated exclusively with the assisted units;

(2) a share of the costs of common areas used primarily by residential tenants. This share shall be in direct proportion to the ratio between the gross floor area of the assisted units and the gross floor areas of all residential units; and

(3) a share of the cost of other items, such as roofs, that cannot specifically be allocated to assisted units, nonassisted units, or commercial space. This share shall be in direct proportion to the ratio between
(A) the gross floor area of the assisted units, plus a share of the gross floor area of common areas used primarily by residential tenants in direct proportion to the ratio between the gross floor area of the assisted units and the gross floor area of all units; and

(B) the total gross floor area of the structure or structures.

1. New section filed 12-29-89 as an emergency; operative 12-29-89 (Register 90, No. 3). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-30-90.
2. New section refiled 4-26-90 as an emergency; operative 4-26-90 (Register 90, No. 23). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 8-24-90.
3. New section refiled 8-27-90 as an emergency; operative 8-27-90 (Register 90, No. 42). A Certificate of Compliance must be transmitted to OAL by 12-26-90 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 12-19-90 as an emergency pursuant to Health and Safety Code section 50771.3; operative 12-19-90 (Register 91, No. 4). A Certificate of Compliance must be transmitted to OAL by 4-18-91 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 12-19-90 order transmitted to OAL 1-4-91; disapproved by OAL 2-4-91 (Register 91, No. 13).
6. New section refiled 2-20-91 as an emergency; operative 2-20-91 (Register 91, No. 13). A Certificate of Compliance must be transmitted to OAL by 6-17-91 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 6-14-91 order including amendment of subsections (a), (b) and (d) transmitted to OAL 5-15-91 and filed 6-24-91 (Register 91, No. 38).

Note: Authority cited: Section 50771.1, Health and Safety Code. Reference: Sections 50735, 50736, 50771.1 and 53133, Health and Safety Code.

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