California Code of Regulations
Title 25 - Housing and Community Development
Division 2 - California Housing Finance Agency
Chapter 3 - Restrictions on Agency Public Benefits to Aliens
Article 2 - Eligibility for Benefits
Section 12106 - Remedies for Ineligibility

(a) In the case of a new tenancy, any household containing one or more applicants who are determined to be ineligible prior to occupancy, shall be denied occupancy to the multifamily program unit.

(b) Where a multifamily program unit is occupied by an ineligible household, the housing sponsor shall, within one hundred eighty (180) calendar days following the completion of the eligibility verification process, either commence proceedings to evict the ineligible household or substitute for the noncompliant multifamily program unit another unit within the housing development or residential structure which is occupied by an eligible household (or which is vacant and reserved for occupancy by an eligible new tenancy household) and which is otherwise compliant with the agency's requirements. Notwithstanding any other provision of this chapter, in no event shall an eviction be commenced with respect to a multifamily program unit before one hundred eighty (180) calendar days following the effective date of this chapter. Once an eviction is commenced it shall be diligently pursued by the housing sponsor until the ineligible household is removed, unless prior thereto, the housing sponsor substitutes a compliant multifamily program unit for the noncompliant one. So long as such eviction is diligently pursued, the housing sponsor and the affected unit shall not be in violation of this chapter with respect to such unit.

(c) In the case of a new loan, all applicants who are not finally verified as eligible shall be denied the single family program loan. In the case of any single family program loan, all applicants who are not finally verified as eligible shall be denied any necessary agency approval of their acquisition of, or addition to title to, the residential structure.

(d) In the event that an applicant's citizenship, other nationality or alien status is misrepresented to a housing sponsor, qualified mortgage lender, the agency or their representatives for the purpose of obtaining an agency public benefit, such housing sponsor, qualified mortgage lender, the agency or their representatives may take appropriate remedial action against such applicant which may include but shall not necessarily be limited to denial of a single family program loan, denial of approval of the applicant's acquisition, or addition to title to, the residential structure securing a single family program loan, foreclosure of a single family program loan or debarment from the receipt of future agency public benefits.

(e) In the event that a housing sponsor or qualified mortgage lender fails to comply with the requirements of this chapter, such noncompliance shall be deemed to be a violation of not only this chapter but also a violation of any regulatory and/or other loan agreement with the agency or mortgage purchase and/or servicing and/or other agreement with the agency, as applicable, which violation shall entitle the agency to pursue any appropriate remedies against the housing sponsor or qualified mortgage lender under any provisions of such agreements or otherwise available at law or in equity. Notwithstanding the foregoing, a qualified mortgage lender shall only be liable for repurchasing a loan if it intentionally or negligently made the loan to an ineligible applicant.