Section 7321 - Legal Documents(a) Upon the award of Program funds to a Project, the Department shall enter into one or more agreements with the Sponsor, which may be in the form of a conditional commitment letter issued by the Department and accepted by the Sponsor, which shall commit monies from the Fund in an amount sufficient to fund the approved loan amount. The agreement or agreements shall contain the following: (1) a description of the approved Project and the permitted uses of Program funds;(2) the amount and terms of the loan;(3) the regulatory restrictions to be applied to the Project through the Regulatory Agreement;(4) provisions governing the construction work and, as applicable, the acquisition of the Project site, and the disbursement of loan proceeds;(5) special conditions imposed as part of Department approval of the Project;(6) requirements for the execution and the recordation of the agreements and documents required under the Program;(7) terms and conditions required by federal or state law;(8) requirements regarding the establishment of escrow accounts for the deposit of documents and the disbursement of loan proceeds;(9) the approved schedule of the Project, including land acquisition if any, commencement and completion of construction or Rehabilitation work, and occupancy by Eligible Households;(10) the approved Project development budget and sources and uses of funds and financing;(11) requirements for reporting to the Department;(12) terms and conditions for the inspection and monitoring of the Project in order to verify compliance with the requirements of the Program;(13) provisions regarding tenant relocation;(14) provisions relating to the erection and placement on or in the vicinity of the Project site a sign indicating that the Department has provided financing for the Project. The Department may also arrange for publicity of the Program loan in its sole discretion; and(15) other provisions necessary to ensure compliance with the requirements of the Program.(b) The Department shall enter into a Regulatory Agreement with the Sponsor for not less than the original term of the loan that shall be recorded against the Project property title prior to the disbursement of funds. The Regulatory Agreement shall include, but not be limited to, the following: (1) the number, type and income level of Assisted Units pursuant to Section 8304 of this title;(2) standards for tenant selection pursuant to Section 8305 of this title;(3) provisions regulating the terms of the rental agreement pursuant to Section 8307 of this title;(4) provisions related to an annual operating budget approved by the Department pursuant to Section 7326;(5) provisions related to a management plan pursuant to Section 7324;(6) provisions related to a Rent schedule, including initial Rent levels for Assisted Units and non-Assisted Units pursuant to subsections (a) and (b) of Section 7312;(7) conditions and procedures for permitting Rent increases pursuant to Section 7312;(8) provisions for limitations on Distributions pursuant to Section 8314 of this title;(9) provisions relating to annual reports, inspections and independent audits pursuant to Section 7325;(10) provisions regarding the deposit and withdrawal of funds to and from reserve accounts;(11) assurances that the Rental Housing Development will be maintained in a safe and sanitary condition in compliance with state and local housing codes and the management plan, pursuant to Section 7324;(12) description of the conditions constituting breach of the Regulatory Agreement and remedies available to the parties thereto;(13) provisions governing use and operation of non-Assisted Units and common areas to the extent necessary to ensure compliance with Program requirements;(14) provisions relating to enforcement of Program requirements by tenants;(15) special conditions of loan approval imposed by the Department;(16) provisions specifying that the Regulatory Agreement shall be binding on all assigns and successors in interest of the Sponsor and that all sales, transfers, and encumbrances shall be subject to Section 7322;(17) for Projects serving Special Needs Populations and/or providing services to the general tenant population, provisions regarding the implementation and maintenance of services and facilities for the targeted Special Needs Population group and/or general tenant population; and(18) other provisions necessary to assure compliance with the requirements of the Program.(c) All loans shall be evidenced by a promissory note payable to the Department in the principal amount of the loan and stating the terms of the loan consistent with the requirements of the Program. The note shall be secured by a deed of trust on the Project property naming the Department as beneficiary or by other security acceptable to the Department; this deed of trust or other security shall be recorded junior only to such liens, encumbrances and other matters of record approved by the Department and shall secure the Department's financial interest in the Project and the performance of Sponsor's Program obligations.Cal. Code Regs. Tit. 25, § 7321
1. New article 4 (sections 7321-7326) and 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)(1)-(b)(3), (b)(7) and (b)(8) 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 50675.1, 50675.6 and 50675.8, Health and Safety Code.
1. New article 4 (sections 7321-7326) and 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)(1)-(b)(3), (b)(7) and (b)(8) filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40).