Section 8006 - Conversion Loans(a) Conversion loans from the fund shall provide short term financing for conversion costs to resident organizations, qualified nonprofit housing sponsors, and local public entities. Conversion loans shall not exceed any of the following: (1) To the extent possible, 50 percent of the conversion costs for the project. However, the loan may be up to 95 percent of the approved conversion costs attributable to the percentage of lower income households in the park when approved by the department.(2) the maximum loan amount established in each request for proposals pursuant to Section 8004(c). In addition, the total debt secured in a senior position to the department's loan plus the department's loan shall not exceed 115% of the value of the collateral securing the loan. The amount of any item of conversion cost shall be subject to department approval based on its necessity, reasonableness, eligibility, and impact on the financial feasibility and security of the project. The loans shall have a maximum term of three years. Borrowers shall make monthly payments of interest only during the loan term unless an alternative repayment term has been approved pursuant to Section 8004(d) and shall repay the loans upon the recordation of permanent financing documents to complete the conversion of the project.
(b) Conversion loans shall provide only supplemental interim financing for conversion costs directly related to the conversion and shall be prorated or limited pursuant to subdivision (a). Conversion loans may be used for conversion costs including, but not limited to, the following items to the extent approved by the department: (1) the acquisition cost of the mobilehome park;(2) loan origination, appraisal, inspection, and other related financing costs;(3) title and escrow fees, recording fees, and other related closing costs;(4) engineering, legal and other professional fees;(5) expenditures required to obtain governmental approvals;(6) relocation costs pursuant to Section 8020;(7) rehabilitation costs; and(c) Conversion loans to local public entities shall comply with the following requirements in addition to those requirements in subdivision (a) and (b):(1) Program commitments to local public entities must be made prior to the acquisition of the park:(2) At the time of funding the park to be acquired must have at least 30% low income residents;(3) Residents participation must be ensured by either resident representation on the Board of Directors of the entity that acquires permanent ownership of the park or by representation on a permanent resident advisory board.(4) Where a park is acquired by a local public entity for transfer to a nonprofit sponsor or resident organization, the transfer must occur within 3 years or the loan must be repaid in full to the department. An additional 3 years may be granted upon a determination by the department that a good faith effort to transfer the park has been made.(5) Where loans are made to a qualifying nonprofit housing sponsor or a local public entity, a regulatory agreement which regulates occupancy, rents and park operations shall be recorded.Cal. Code Regs. Tit. 25, § 8006
1. Amendment of section and NOTE filed 5-11-2001; operative 5-11-2001 pursuant to Government Code section 11343.4 (Register 2001, No. 19).
2. Change without regulatory effect amending subsection (a)(2) filed 10-13-2015 pursuant to section 100, title 1, California Code of Regulations (Register 2015, No. 42). Note: Authority cited: Sections 50406(n) and 50786(a), Health and Safety Code. Reference: Sections 50406, 50781(b), 50783, 50784, 50785(a)(5) and 50786(c), Health and Safety Code.
1. Amendment of section and Note filed 5-11-2001; operative 5-11-2001 pursuant to Government Code section 11343.4(Register 2001, No. 19).
2. Change without regulatory effect amending subsection (a)(2) filed 10-13-2015 pursuant to section 100, title 1, California Code of Regulations (Register 2015, No. 42).