Section 8206.1 - Repayment of Home Funds, Program Income, Proceeds from the Investment of Home Funds, and Recaptured Funds(a) Repayment of HOME funds and matching contributions, program income, proceeds from the investment of HOME funds, and recaptured funds are subject to the requirements of 24 CFR Sections 92,252, 92.254, 92.300 and 92.503 and this Section. HOME funds invested in housing that is not completed or rental housing that does not comply with the affordability requirements for the required period shall be repaid to the Department.(b) Except as otherwise provided in this subsection (b), all program income and recaptured funds shall be remitted directly to the Department for deposit into the Department's local account. (1) If requested by the State Recipient, the Department shall allow program income and recaptured funds to be deposited into the State Recipient's local account, subject to the requirements of 24 CFR Sections 92.502(c)(3) and 92.503(a)(1).(2) If requested by a CHDO, the Department shall allow recaptured funds and proceeds from the investment of HOME funds to be retained by a CHDO that meets the requirements of subsection (c) of this section.(3) Where HOME funds are invested in housing to assist acquisition by a first-time homebuyer who sells the home unit or repays the loan prior to the end of the required affordability period, the HOME funds repaid to the CHDO or State Recipient shall be recaptured, exceptions may be requested to use resale for limited equity forms of ownership like cooperatives and community land trust.(4) State Recipients and CHDOs that retain program income, proceeds from the investment of HOME funds, and recaptured funds shall submit quarterly reports and an annual report documenting all local account activity. Failure to submit the required reports shall result in a negative performance rating in future applications from funding. Continued failure to comply with all federal and state requirements for use of these funds shall result in a termination of the agreement for the State Recipient or CHDO to retain such funds.(c) The Department may permit a CHDO to retain collections if it demonstrates to the satisfaction of the Department all of the following:(1) adherence to program requirements and deadlines identified in Sections 8216 and 8217 in the last four preceding State HOME contracts including CHDO certification and application requirements identified in Sections 8204 and 8204.1 and federal overlays;(2) successful completion of at least six housing projects with a total of at least 100 units;(3) no unresolved monitoring findings on completed HOME projects; and(4) service to the community, as defined by Section 8204.1(e), of at least ten years;(d) A CHDO that meets the requirements of subsection (c) shall be subject to the requirements of 24 CFR Section 92.502(c)(3), but shall only use proceeds from the investment of HOME funds for eligible activities pursuant to 24 CFR Sections 92.205 and 92.206. A CHDO that has been permitted to retain proceeds in one HOME standard agreement shall be permitted to retain proceeds in all future contracts. If at any time a CHDO fails to demonstrate compliance with the requirements of subsection (c), the Department may require the CHDO to remit all future collections to the Department.(e) When a CHDO applies for a rental housing development and the Department has approved the CHDO to retain proceeds in accordance with Section 8206.1(b)(2), the rental housing development shall:(1) be underwritten by the Department in compliance with Section 8212.2;(2) comply with 24 CFR part 92 which includes project requirements specified in 24 CFR Sections 92.250, 92.251, 92.252, and 92.253; and(3) be inspected by the Department pursuant to 24 CFR Section 92.504(d)(1).(f) In the event of a breach or violation of Section 8206.1(e)(1) and (2) by the CHDO and the breach or violation is not cured to the satisfaction of the Department, the Department may declare a default and may seek all available legal remedies including the following: (1) Collect all rents and income in connection with the operation of the development;(2) Take possession of the development in accordance with Section 8206.1(e)(1) and (2);(3) Apply to any court, State or federal, for specific performance of this Agreement or for the appointment of a receiver to take over and operate the development;(4) Accelerate all amounts, including outstanding principal and interest due. Declare a default and initiate a foreclosure in accordance with the provisions of the HOME Deed of Trust and State law regarding foreclosures.Cal. Code Regs. Tit. 25, § 8206.1
1. New section filed 9-9-2004; operative 9-9-2004 pursuant to Government Code section 11343.4 (Register 2004, No. 37). Note: Authority cited: Sections 50406 and 50896.3(b), Health and Safety Code. Reference: 24 CFR Sections 92.254, 92.300, 92.502(c)(3), 92.503 and 92.503(a)(1); and Sections 50896 and 50896.1, Health and Safety Code.
1. New section filed 9-9-2004; operative 9-9-2004 pursuant to Government Code section 11343.4 (Register 2004, No. 37).