Section 7304 - Eligible Uses of Funds(a) Funds shall be used only for approved eligible costs that are incurred on the Project as set forth in this section, including the Refinance of interim loans used to pay such costs. In addition, the costs must be necessary and must be consistent with the lowest reasonable cost consistent with the Project's scope and area as determined by the Department.(b) Eligible costs include the following: (1) property acquisition;(2) refinancing of existing long-term debt, only in connection with a Project involving Substantial Rehabilitation, and only to the extent necessary to reduce debt service to a level consistent with the provision of Affordable Rents in Assisted Units and with the Fiscal Integrity of the Project;(4) construction and Rehabilitation work;(5) off-site improvements, such as sewers, utilities and streets, directly related to, and required by the Rental Housing Development;(6) on-site improvements related to the Rental Housing Development;(7) architectural, appraisal, engineering, legal and other consulting costs and fees, which are directly related to the planning and execution of the Project and which are incurred through third-party contracts;(8) development costs of a residential Unit reserved for an on-site manager, childcare facilities, and after-school care and social service facilities integrally linked to, and addressing the needs of the tenants of the Assisted Units;(9) a reasonable developer fee subject to the provisions of Section 8312 of this title;(11) carrying costs during construction, including insurance, construction financing fees and interest, taxes, and any other expenses necessary to hold the property while the Rental Housing Development is under construction;(12) building permits and state and local fees;(13) capitalized operating and capitalized replacement reserves up to the amount of the initial deposit required by the Department pursuant to Sections 8308(b) and 8309(b) of this title.(14) escrow, title insurance, recording and other related costs;(15) costs for items intended to assure the completion of construction, such as contractor bond premiums;(16) environmental hazard reports, surveys, and investigations;(17) costs of relocation benefits and assistance required by law; and(18) any other costs of Rehabilitation or new construction approved by the Department.(c) Except as provided in subsection (b)(8), above, no Program funds shall be used for costs associated exclusively with non-Restricted Units or Commercial Space. A Manager's Unit may be considered to be a Restricted Unit for the purpose of allocating development costs. If only a portion of the Rental Housing Development consists of Restricted Units, the Program loan amount shall not exceed the sum of the following: (1) the costs of all items specified in subsection (b), above, associated exclusively with the Restricted Units;(2) a share of the costs of common areas used primarily by residential tenants. This share shall be in direct proportion to the ratio between the gross floor area of the Restricted Units and the gross floor area of all residential Units; and(3) a share of the cost of other items such as roofs that cannot specifically be allocated to Restricted Units, non-Restricted Units, or Commercial Space. This share shall be in direct proportion to the ratio between:(A) the gross floor area of the Restricted Units, plus a share of the gross floor area of common areas used primarily by residential tenants in direct proportion to the ratio between the gross floor area of the Restricted Units and the gross floor area of all Units; and(B) the total gross floor area of the structure or structures.Cal. Code Regs. Tit. 25, § 7304
1. New section filed 1-8-2002; operative 1-8-2002 pursuant to Government Code section 11343.4 (Register 2002, No. 2).
2. Amendment of subsections (b)(9) and (b)(13) filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40). Note: Authority cited: Sections 50406(n), 50675.1(c) and 50675.11, Health and Safety Code. Reference: Sections 50675.2(e) and (h) and 50675.5, Health and Safety Code.
1. New section filed 1-8-2002; operative 1-8-2002 pursuant to Government Code section 11343.4 (Register 2002, No. 2).
2. Amendment of subsections (b)(9) and (b)(13) filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40).