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 5 - Deferred-Payment Rehabilitation Loans
Section 7410 - Conditions of Fund Commitments to Local Entities

(a) Before the Department disburses funds, the local entity will be required to submit to the Department the following documents which will have been prepared by the Department or at its direction:

(b) Local entities shall agree not to discriminate or permit discrimination on account of race, color, religion, ancestry, sex, age, national origin, marital status, and mental or physical handicap, in accordance with all local, state, and federal laws governing and restricting such discrimination or requiring affirmative action. In addition, local entities shall agree not to discriminate, due in whole or in part to the consideration of conditions, characteristics or trends in the neighborhood or geographic area surrounding the housing development, unless it can demonstrate that such consideration in the particular case is required to avoid an unsafe and unsound business practice.

(c) Local entities shall agree not to substitute commitments from the Fund for similar local funds. This requirement applies to the local entities overall rehabilitation activities in the jurisdiction, rather than on a loan-by-loan basis.

(d) The Standard Agreement with local entities shall specify, in addition to the other items in this section, conditions including, but not limited to:

(e) Local entities shall provide the Department with reports on the progress of rehabilitation and related purposes for which the funds have been used. Reports shall be submitted on a semi-annual basis or at other intervals required by the Department. The Department shall determine the required contents of the reports.

(f) Pertinent information on each loan to borrowers shall be provided promptly to the Department in the form required by the Department. All loan documents and agreements related to loans to borrowers shall be kept on file by the local entity as directed by the Department.

(g) Primary responsibility for monitoring and enforcing conditions of the loans shall be taken by local entities, and such enforcement shall be taken promptly by the local entity to protect the security of the loan or the benefits to low-income tenants. Local entities shall provide that inspections of the premises to be rehabilitated by loan proceeds are performed and that such work meets applicable code standards.

(h) Notwithstanding any other provisions of these regulations, and any amendments thereto, or any terms of any documents, agreements or notes executed by and between the Department and the local public entity, the obligation of the local public entity to repay principal and interest on a commitment made under these regulations shall be limited to that amount actually recovered from each loan made by the local public entity.

(i) Nonprofit corporations obtaining commitments from the Fund shall present evidence of adequate fidelity bonds.