Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The department shall enter into a Standard Agreement with the sponsor which shall encumber monies from the fund in an amount sufficient to fund the approved loan amount. The Standard Agreement shall contain the following:
(1) A description of the approved project and the permitted uses of program funds;
(2) provisions governing the amount and terms of the loan;
(3) provisions regarding the regulatory restrictions to be applied to the project through the Regulatory Agreement;
(4) provisions governing the rehabilitation work and, as applicable, the acquisition or refinancing, and the disbursement of loan proceeds;
(5) special conditions imposed as part of department approval of the project;
(6) requirements for the execution and, where appropriate, the recordation of the agreements and documents required under the program;
(7) terms and conditions required by federal or state law;
(8) requirements regarding the establishment of escrow accounts for the deposit of documents and the disbursement of loan proceeds;
(9) remedies available to the department in the event of a violation, breach, or default of the Standard Agreement to ensure compliance with program requirements for the full term of the Regulatory Agreement, including repayment of all costs of enforcement; and
(10) other provisions necessary to ensure compliance with the requirements of this program.
(b) The department shall enter into a Rehabilitation Loan Agreement with the sponsor which shall be executed prior to the disbursement of funds to the sponsor, govern the performance of the project, and include the following:
(1) The approved schedule of the project, including transfer of ownership, if any, commencement and completion of rehabilitation work, and occupancy by eligible households;
(2) provisions ensuring that the construction contract is consistent with section 7686 and other program requirements and that all financing agreements are consistent with program requirements;
(3) the approved budget for rehabilitation work and acquisition and refinancing, if applicable;
(4) provisions relating to fund disbursement;
(5) provisions relating to acquisition or refinancing agreements, preparation of rehabilitation specifications, bidding, awards to contractors, and disbursement of funds to contractors, or others;
(6) requirements for reporting to the department;
(7) terms and conditions for the inspection and monitoring of the project in order to verify compliance with the Standard Agreement and this agreement;
(8) provisions regarding tenant relocation;
(9) bonding and insurance requirements consistent with the requirements of this subchapter;
(10) conditions constituting breach of the Rehabilitation Loan Agreement and remedies available to the parties thereto, including repayment of costs of enforcement.
(11) other provisions necessary to ensure compliance with the requirements of this program.
(c) The department shall enter into a Regulatory Agreement with the sponsor for not less than the original term of the loan which shall be recorded against the project property prior to the disbursement of funds. The Regulatory Agreement shall include the following:
(1) designation of assisted units;
(2) standards for tenant selection pursuant to section 7682(a);
(3) provisions regulating the terms of the rental agreement pursuant to section 7682(b);
(4) provisions related to an annual budget approved by the department pursuant to section 7696;
(5) provisions related to a management plan pursuant to section 7694;
(6) provisions related to a rent schedule, including initial rent levels for assisted and non-assisted units pursuant to section 7683(a);
(7) conditions and procedures for permitting rent increases pursuant to section 7683(b);
(8) provisions for limitations on profit pursuant to section 7684;
(9) provision requiring annual reports, inspections and audits pursuant to section 7695;
(10) provisions regarding the withdrawal of funds from a reserve account and additional payments by the department;
(11) assurances that sponsor will maintain the rental housing development in a safe and sanitary condition in compliance with state and local housing codes and the management plan pursuant to section 7694;
(12) conditions constituting breach of the Regulatory Agreement and remedies available to the parties thereto;
(13) provisions governing use and operation of unassisted units and common areas to the extent necessary to ensure compliance with program requirements;
(14) provisions authorizing enforcement of program requirements by tenants;
(15) special conditions of loan approval imposed by the department;
(16) provisions specifying that the Regulatory Agreement shall be binding on all assigns and successors in interest of the sponsor and that all sales, transfers, and encumbrances shall be subject to section 7692; and
(17) other provisions necessary to assure compliance with the requirements of the program.
(d) All loans shall be evidenced by a promissory note payable to the department in the principal amount of the loan and stating the terms of the loan consistent with the requirements of the program. The note shall be secured by a deed of trust on the project property naming the department as beneficiary or by other security acceptable to the department; this deed of trust or other security shall secure the department's financial interest in the project and the performance of sponsor's program obligations.
1. New section filed 6-12-89 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 6-12-89 (Register 89, No. 24). A Certificate of Compliance must be transmitted to OAL within 120 days or the regulation will be repealed on 10-10-89. For history of former subchapter 8 (sections 7700-7714.5, not consecutive), see Register 85, No. 33.
2. New section refiled 10-6-89 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 10-10-89 (Register 89, No. 42). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 2-7-90.
3. New section refiled 2-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 2-7-90 (Register 90, No. 6). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 6-7-90.
4. Amendment of subsections (a)-(c) filed 3-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 3-5-90 (Register 90, No. 12). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 7-3-90.
5. Certificate of Compliance as to 2-5-90 and 3-5-90 orders including amendment of subsections (a) and (c) transmitted to OAL 5-22-90 and filed 5-29-90 (Register 90, No. 29).
Note: Authority cited: Section 50668.5, Health and Safety Code. Reference: Sections 50668.5, 50670 and 53130, Health and Safety Code.
