Section 7226 - Grant Agreement(a) In order to close a grant, a grantee is required to execute a Grant Agreement with the Department.(b) The Grant Agreement shall be in a form determined by the Department and shall contain, but not be limited to, the following conditions: (1) Assisted Units. It shall specify the minimum number of units of the housing development which have been designated as assisted units subject to program occupancy and resale restrictions.(2) Recordation. It shall require the grantee to cause the Grant Agreement to be recorded in the Official Records of the county in which the housing development is or will be situated.(3) Lien. The Grant Agreement shall be recorded as a lien on the real property of the housing development, or the title of a manufactured home not on a permanent foundation, in favor of the Department for the purpose of securing performance of the conditions of the Grant Agreement. The lien shall endure for the duration of the Grant Agreement and shall be subject to the provisions of Section 7230.(4) Duration. It shall state that it is binding on the grantee for a term of fifty-five (55) years for rental housing development new construction and rehabilitation, a term of twenty (20) years for conventionally-constructed ownership housing or manufactured housing placed on a permanent foundation, and a term of ten (10) years for manufactured housing not on a permanent foundation. The Department may in its discretion prescribe a lesser period for the duration of Grant Agreements relating to housing to be developed for ownership by individual agricultural households.(5) Conveyance. It shall state that for the duration of the Grant Agreement, no contract for sale or conveyance of the housing development, or any portion thereof, shall be entered into or made without the express prior written approval of the Department, which approval shall be given in accordance with the provisions of Section 7228.(6) Covenants. In addition, the Grant Agreement will contain, but not be limited to, the following covenants:(A) Agricultural households shall be given a priority for occupancy in non-assisted units, and those agricultural households of low income shall be given a preference for occupancy in assisted units.(B) The grantee shall accept the criteria for tenant and homeowner selection that has been determined by the Department for assisted units.(C) The grantee shall accept the terms of occupancy agreements that have been prescribed by the Department for assisted units.(D) With regard to rental housing developments, the grantee shall additionally agree to abide by the provisions of Section 7234.(7) The Grant Agreement shall further provide that in the event of a breach of any of its conditions or covenants, the grantee or its successors in interest, the Department shall have the option to enforce the Grant Agreement by proceeding at law or in equity. The Department may, at its option, require the grantee or its successor in interest to immediately repay to the State the total amount of the grant then due with interest. The interest rate shall be the same as the average rate returned by the investment of state funds through the California Pooled Money Investment Board from the date of breach to the date of repayment.(8) It shall provide that in the event of a forced sale or conveyance of the housing development resulting from an action to foreclose on a mortgage or deed of trust, the execution of a judgment lien, or other action resulting in an involuntary sale, the purchaser shall take title subject to these conditions and limitations, unless the appropriate amount of the grant is returned to the Department in accordance with these regulations.Cal. Code Regs. Tit. 25, § 7226
1. Renumbering of former Section 7226 to Section 7224 and renumbering and amendment of Section 7228 to Section 7226 filed 2-10-83; designated effective 3-4-83 pursuant to Government Code Section 11346.2(d) (Register 83, No. 7).
2. Amendment of subsections (b)(3)-(4) and (b)(6)(D) filed 4-2-2008; operative 5-2-2008 (Register 2008, No. 14). Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.
1. Renumbering of former Section 7226 to Section 7224 and renumbering and amendment of Section 7228 to Section 7226 filed 2-10-83; designated effective 3-4-83 pursuant to Government Code Section 11346.2(d) (Register 83, No. 7).
2. Amendment of subsections (b)(3)-(4) and (b)(6)(D) filed 4-2-2008; operative 5-2-2008 (Register 2008, No. 14).