Section 370.17 - Replacement Housing Payments to Owner-Occupant for 180 Days or More Who Purchases a Replacement Dwelling(a) General. (1) A displaced owner-occupant of a dwelling may receive additional payments, the combined total of which may not exceed $15,000.00, for the additional cost necessary: (A) To purchase replacement housing;(B) To compensate the owner for the loss of favorable financing on his existing mortgage in the financing of replacement housing; and(C) To reimburse the owner for incidental expenses incident to the purchase of replacement housing when such costs are incurred as specified herein.(2) The owner-occupant is eligible for such payments when: (A) He has been in occupancy of the dwelling to be acquired as his primary residence for at least 180 consecutive days immediately prior to and including the date of initiation of negotiations for the parcel; and(B) The property was acquired from him by the state; and(C) He purchased and occupied a decent, safe and sanitary dwelling within the time period specified in Section 370.16(b).(b) Purchase Differential Payment. (1) Amount of Payment. The replacement housing payment is the amount, if any, when added to the amount for which the Department acquired his dwelling, equals the actual cost which the owner is required to pay for a decent, safe, and sanitary dwelling, or the amount determined by the Department as necessary to purchase a comparable replacement dwelling, whichever is less. In the case of a prior owned dwelling, the actual cost of the prior owned dwelling will be based on the historical cost incurred at the time of its purchase. Any additional cost to bring the prior owned dwelling up to minimum decent, safe and sanitary standards may be included in the historical cost.(2) Determination of Amount Necessary to Purchase Comparable Replacement Housing. The Department shall determine the amount necessary to purchase comparable replacement housing by any reasonable method the Department finds necessary.(c) Interest Differential Payment. (1) General. (A) Interest differential payments are provided to compensate a displaced person for the increased interest costs he is required to pay for financing a replacement dwelling and shall be allowed only when both of the following conditions are met: 1. The dwelling acquired by the Department was encumbered by a bona fide mortgage which was a valid lien on such dwelling for not less than 180 days prior to the initiation of negotiations; and2. The mortgage on the replacement dwelling bears a higher effective rate of interest than the stated mortgage interest rate on the acquired dwelling. As used in this subsection the term "mortgage" shall include those liens as are commonly given to secure advances on, or the unpaid purchase price of, mobile homes or other vehicles, under the laws of the State of California, together with the credit instruments, if any, secured thereby.
(B) The interest differential payment will be based on and limited to the lesser of the following amounts: 1. The present worth of the right to receive the monthly difference in mortgage payments on the existing mortgage using the old and new interest rates; or2. The present worth or the right to receive the monthly difference in mortgage payments on the new mortgage using the old stated and new interest rates.(2) Payment Computation. The Department shall determine the amount of the interest differential payment.(3) Interest Rate of Replacement Dwelling Mortgage. The interest rate of the mortgage on the replacement dwelling to be used in the computation shall not exceed the prevailing interest rate currently charged by mortgage lending institution in the vicinity.(4) Discount Rate. The present worth shall be based on a discount rate equal to the prevailing interest rate paid on savings deposits by commercial banks in the general area in which the acquired dwelling is located.(5) Points and Loan Fees. (A) To the amount of the increased payment shall be added the following:1. The amount actually paid, if any, as points by the eligible displaced owner in the purchase of the replacement dwelling, not to exceed an amount calculated by multiplying the prevailing point rate by the amount of the eligible portion of the mortgage on the replacement dwelling, or the probable replacement cost of the acquired dwelling as determined by the Department whichever is less. A "point" is defined as 1% of the outstanding mortgage balance.2. The amount actually paid, if any, as loan origination or service fees by the eligible displaced owner in the purchase of the replacement dwelling, not to exceed one percent of either the mortgage on the acquired dwelling, or 1% of the probable replacement cost of the acquired dwelling as determined by the Department, whichever is less.(6) . Variable Rate Mortgages.(A) The interest rate of the mortgage on the acquired property shall be deemed to be that stated in the mortgage except that in those mortgages wherein the lender has the lawful right to make periodic adjustments in the interest rate, the interest rate in effect at the time of acquisition by the Department shall be used in the increased interest cost computation.(B) The interest rate of the mortgage on the replacement dwelling shall be deemed to be the rate which will be applied to determine the first periodic payment of principal and interest on said mortgage.(d) Incidental Expenses. (1) Amount of Payment. The incidental expenses payment is the amount necessary to reimburse the homeowner for the actual costs incurred by him incident to the purchase of the replacement dwelling, but not for prepaid expenses. Such expenses shall be reasonable and legally required or customary in the community. Such costs may include, but are not limited to, the following items where actually paid by the displaced homeowner: (A) Legal, closing and related costs including title search, preparing conveyance contracts, notary fees, surveys, preparing drawings or plates and charges paid incident to recordation;(B) Lenders, Federal Housing Administration or Veterans Administration appraisal fee;(C) Federal Housing Administration or Veterans Administration application fee;(D) Certification of structural soundness when required by lender, Federal Housing Administration or Veterans Administration;(F) Owner's title policy or abstract of title;(H) State real estate transfer tax;(I) Sales or transfer taxes;(J) No fee, cost, charge or expense is reimbursable as an incidental expense when it is determined to be a part of the debt service, or finance charge under the Truth in Lending Act, Title I, Public Law 90-321, and Regulation Z issued pursuant thereto by the Board of Governors of the Federal Reserve System.(e) Owner Retention of Dwelling. Where an owner-occupant retains his dwelling, the replacement housing payment shall be computed in accordance with the appropriate paragraph below: (1) Dwelling is Decent, Safe and Sanitary. The payment, if any, shall be the amount by which the costs to relocate the retained dwelling exceeds the appraised value of the dwelling. The costs to relocate may include the reasonable costs of acquiring a new site and other expenses incident to retaining, moving the dwelling and restoring it to a condition comparable to that before the move.
(2) Dwelling is Not Decent, Safe and Sanitary. The payment shall be computed as shown above except that the costs to cure the decent, safe and sanitary deficiencies shall be included in the costs to relocate.(3) Limitations. The payment computed under Paragraphs (1) or (2) of this subsection may not exceed the amount which the owner would have obtained under subsection (b) (1) of this Section or, if no comparables are available on which to make such a determination, the cost of a new dwelling adequate to accommodate the displaced person.Cal. Code Regs. Tit. 23, § 370.17
Note: Authority cited: Section 7267.8, Government Code. Reference: Section 7268, Government Code.