Section 7404 - Eligibility Criteria(a) The local entity shall have available, and commit to the extent feasible, CHFA funds, CDBG grants and BMIR loans, HUD 312 loans, Marks-Foran rehabilitation and refinancing funds, FmHA loans or other funds to be used in combination with commitments from the Fund in designated areas. Local entities that are operating or will operate one or more of the following rehabilitation programs in conjunction with this program are eligible to apply for Fund commitments from the Department pursuant to the provisions of this subchapter. (1) A rehabilitation loan program conducted in a CHFA Concentrated Rehabilitation Area designated pursuant to Section 51302 of the Health and Safety Code.(2) A residential rehabilitation financing program conducted pursuant to the Marks-Foran Program commencing with Section 37910 of the Health and Safety Code.(3) A city-wide or county-wide systematic enforcement program pursuant to which the CHFA has allocated sufficient funds for improvement loans for rehabilitation of housing pursuant to Section 51311 of the Health and Safety Code.(4) A code enforcement agency repairing substandard structures following the owner's failure to commence work following a final notice or order from the enforcement agency.(5) A program conducted by the CHFA in a mortgage assistance area as defined in Section 50085, Health and Safety Code, provided such area is located in a rural area.(6) A rehabilitation or code enforcement program being undertaken by a local entity in an area in which federal funds are being used or will be used in conjunction with the Deferred Payment Rehabilitation Loan Program.(b) Local entities applying for fund commitments to lend to local borrowers must demonstrate upon application: (1) capacity to undertake or operate a rehabilitation loan program; and(2) capacity to manage, monitor, and enforce the terms and conditions of this subchapter.(c) When a local entity proposes, in an application for commitments from the Fund, to make rehabilitation loans within the jurisdiction of a city or county which has made or is considering its own application for funds from the Fund, the local entity must receive prior written authorization for such application from the governing body of the city or county. Such written authorization shall be included with the application made by the local entity.(d) Applications by nonprofit corporations for new commitments or loans from new commitments from the Fund shall include approval for such applications from the governing body of each city or county having jurisdiction over the area or areas in which loans are to be made. Said approval shall specifically authorize the nonprofit corporation to make rehabilitation loans in the designated area or areas.(e) The Department may provide deferred payment loans directly to the owner-occupant of a dwelling unit or owner of a rental housing development pursuant to Section 50668(b) of the California Health and Safety Code.(f) An owner-occupant household of low or moderate income which satisfies the following criteria is eligible for a deferred payment loan pursuant to the provisions of this subchapter: (1) It is the owner-occupant of the unit to be assisted.(2) The property is eligible under a rehabilitation program designated under subsection(a) of this section. For projects which directly benefit from funds of programs designated under (a)(1)-(a)(5) borrowers may be low or moderate income households. For projects which directly benefit from funds of programs designated under (a)(6), owner-occupant borrowers shall be low income households only, except that where program areas designated under (a)(6) overlap with other eligible program areas, the least restrictive income limits for borrowers shall apply.(3) The monthly payments required by any combination of loans available through CHFA, Marks-Foran, CDBG, HUD 312, FmHA and rehabilitation/refinancing by private lending institutions or other sources to cover the cost of meeting rehabilitation standards would result in the total shelter expense exceeding the owner's ability to afford such shelter expenses.(g) An owner of rental units which satisfies the following criteria is eligible for a deferred payment loan pursuant to the provisions of this subchapter: (1) It owns a single-family or multi-family rental residential property in which the units are, or will be, occupied by low-income households pursuant to Section 7416(b).(2) The property is in a rehabilitation program designated under subsection (a).(3) The owner agrees to rent to low-income households pursuant to Section 7416.(4) The owner agrees to limit rent increases pursuant to Section 7412(c).(5) The loan is necessary to avoid increases in monthly debt service, necessitated by any combination of loans available through CHFA, Marks-Foran, CDBG, HUD 312, FmHA, refinancing/rehabilitation by private lending institutions, or local agency lending programs, which are necessary to cover the cost of meeting rehabilitation standards, as determined by increased rents, which either would exceed the affordable rents for low-income households residing in the rental property at the commencement of rehabilitation work funded by the local agency or by others; or which would make it economically infeasible to use available subsidies, such as Section 8, in order to provide affordable rents to low-income households.(h) The Loan Committee may modify income requirements and definitions to allow a local entity to use standards more compatible with those used in local programs if the purpose of this program is furthered by such modification.Cal. Code Regs. Tit. 25, § 7404
1. Amendment filed 10-2-81; effective thirtieth day thereafter (Register 81, No. 40).
2. Amendment filed 11-2-82; effective thirtieth day thereafter (Register 82, No. 45).
3. Amendment filed 6-3-85; effective thirtieth day thereafter (Register 85, No. 23).
4. Amendment of subsections (e) and (f)(2) filed 3-17-86; effective thirtieth day thereafter (Register 87, No. 12). Note: Authority cited: Section 50662, Health and Safety Code. Reference: Sections 50660-50668, Health and Safety Code.
1. Amendment filed 10-2-81; effective thirtieth day thereafter (Register 81, No. 40).
2. Amendment filed 11-2-82; effective thirtieth day thereafter (Register 82, No. 45).
3. Amendment filed 6-3-85; effective thirtieth day thereafter (Register 85, No. 23).
4. Amendment of subsections (e) and (f)(2) filed 3-17-86; effective thirtieth day thereafter (Register 87, No. 12).