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 7416 - Tenancy Standards and Procedures
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
The following terms and conditions govern tenant selection, relations, and evictions for low-income tenants of rental units rehabilitated with loans from the Fund.
(a) Initial priority for rental units shall be given to those households which resided on the premises prior to rehabilitation and were displaced due to, or during the process of, rehabilitation.
(b) Borrowers shall agree to rent 100 percent of the residential units in a housing development rehabilitated with loans from the Fund, other than owner-occupied residences or units, to low income households during the term of the loan, except where it is necessary to preserve the economic feasibility of the development or avoid displacement. In such cases, the Department may approve a lower percentage, however, in no case shall less than 50 percent of the units be designated for low income households. If the designated number of low income units are initially occupied by non-low income households but subsequently become vacant, the borrower shall agree to rent such units to low income households. The borrower shall affirmatively seek such households by contacting the local housing authority. Where the borrower cannot obtain such low income tenants by contacting the local housing authority, the borrower shall contact the local entity for guidance. The local entity shall contact the Department if its efforts do not result in low income tenants for the vacant units.
(c) If rental subsidies are available, borrowers may accept rent subsidies for assisted units.
(d) Rents shall remain at pre-loan application levels until rehabilitation is completed. After rehabilitation, increases in rents shall be limited to avoid displacement of low and moderate income households pursuant to Government Code Section 7265.3(b). Proposed after-rehabilitation rents shall be established by the local entity and borrower prior to approval of the loan agreement by the Department. Rents shall be set at levels in accordance with the provisions set forth in Section 7412(c) and consistent with the economic feasibility of the housing development and a fair rate of return to the owner of the housing development as determined by the Department.
(e) The borrower shall agree to use a lease prepared by the Department which conforms to California law and the requirements of Sections 11402 and 11405-11406 or other lease subject to the approval of the Department.
(f) The borrower and tenants shall comply promptly and fairly with their responsibilities under law and as set forth in the lease. In addition, the borrower shall make every effort feasible to ensure the stability and security of tenants.
(g) If a tenant's income exceeds the standard pursuant to which he or she was accepted for tenancy, that fact alone shall neither cause the tenant's eviction nor be a violation of the borrower's loan agreement or these regulations.
1. Amendment filed 10-2-81; effective thirtieth day thereafter (Register 81, No. 40).
2. Amendment of subsection (b) filed 11-2-82; effective thirtieth day thereafter (Register 82, No. 45).
Note: Authority cited: Section 50662, Health and Safety Code. Reference: Sections 50660-50668, Health and Safety Code.
