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(continued)
(F) Charges against the grant for such fees may be approved to a maximum of 1% of the housing development's costs or $100 per unit, whichever is less.

(4) Legal Fees. These fees must be reasonable relative to the legal work required. Normally, the legal fees allowable under FmHA and/or HUD-FHA schedules and practices will provide the upper limit for such expenses. Billings or statements for legal services must be itemized.
(d) Waivers. The Director may waive any requirement of this section not required by law if it is determined that such requirement would adversely affect the purposes of the grant program or that such requirement would impose an intolerable burden on the grantee.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7208. Special Conditions.
(a) Matching Share. Before the Department will make a firm commitment for a grant, the grantee must demonstrate to the satisfaction of the Department that it can and will provide for the housing development a matching share at least equal to the offered grant.
(b) Architectural and Engineering Requirements. Housing developments not involving a public lender or insurer of loans shall be subject to a Departmental review of the architectural and engineering aspects of the project.
(c) Grant Documents. Before the Department will close on a grant, the grantee will be required to submit to the Department for prior approval the following documents which will have been prepared by the Department or at its direction:
(1) A resolution authorizing the receipt of the grant;
(2) Evidence of the grantee's title or right to title to the proposed site;
(3) An Agreement to Enter a Grant Agreement, a Grant Agreement and/or other agreements prescribed by the department;
(4) Other organizational or housing development documents required by the Department.
(d) Non-Discrimination and Affirmative Action. Grantee must agree not to discriminate on account of race, sex, age, marital status, physical disability, creed, religion, or national origin and to abide by all local, state and federal regulations precluding such discrimination. Moreover, grantees must agree to adopt and implement affirmative action programs to cover all aspects of the construction, rehabilitation, marketing, and management of the housing developed with the assistance of the Fund.
(1) Grantees will be required to execute certificates of nondiscrimination.
(2) Grantees will be required to adopt and implement affirmative action programs approved by the Department.
(e) Local, State or Federal Requirements. Grantees are required to abide by such local, state or federal rules and regulations as are applicable to the proposed housing development. These may include but are not limited to: zoning ordinances, building and housing codes; planning; historical preservation, environmental, tenant occupancy, and relocation regulations; and applicable federal requirements.
(f) Reports. Grantees are required to provide the Department with periodic reports on the progress of the housing development and the expenditure of grant funds from the date of grant approval to date of completion of the housing development and occupancy by agricultural households. Grantees are also required to provide the Department with reports on the characteristics of the housing development and its occupants.
(g) Minimum Number of Assisted Units.
(1) For rental or cooperative housing developments the minimum number of units to be designated as assisted units shall be determined as follows:
(A) When the funds granted by the Department constitute an amount less than 25% of the total development/rehabilitation cost or value of an assisted project, whichever is applicable, the number of units subject to agricultural household occupancy and resale restrictions (assisted units) shall be as follows: For every 1% of the total development/rehabilitation cost or value which the funds granted by the Department constitute, a minimum of 2% of the total number of units of the housing development shall be designated as assisted units.
(B) When the funds granted by the Department constitute an amount of 25% or more of the total development/rehabilitation cost or value of a housing development, all of the units of the housing development shall be designated as assisted units.
(C) In the event that the agricultural worker population in a cooperative or rental housing development falls below the minimum number required to occupy the housing development either through change of status or by persons leaving the housing development, the grantee shall implement an affirmative marketing plan which will recruit other agricultural households as units become available until the minimum number is once again in occupancy.
(2) For homeownership housing developments, the number of assisted units shall be the total number of units to be purchased by individual agricultural households with the assistance of grant funds. In no event shall the percentage of assisted units in the housing development be less than the percentage of the total development cost or value which grant funds constitute.
(h) Cooperative Housing Corporations. The articles of incorporation and bylaws of grantees organized as cooperative housing corporations must be drafted or amended to implement the restrictions of the Grant Agreement and the requirements of this subchapter. The articles of incorporation and bylaws must be submitted to the Department for approval prior to the disbursement of grant funds.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.










s 7210. Site and Design Criteria.
(a) Grantees shall observe the following criteria relative to the location and design of proposed housing developments:
(1) Site Criteria.
(A) The location is in or reasonably near a residential area with access to schools, shopping, medical services, social services and employment;
(B) The location does not unnecessarily confine assisted units to an area in which there exists a high concentration of low income households.
(C) The location of the housing development is not found to be inconsistent with the housing element or housing assistance plan of the public jurisdiction in which the housing development is to be located;
(D) The characteristics of the site, including its topography and distance to public utilities, do not result in unreasonable development or rehabilitation costs; and
(E) The site will not be in a 100 year flood plain unless sufficient measures have been taken, as determined by the Department, to ensure the security of the housing development in the event of flooding.
(2) Design Criteria.
(A) The design will provide safe, sanitary, and decent housing meeting the requirements of all applicable building and housing standards and codes;
(B) The design to the maximum extent feasible, is compatible with the existing community in which the housing development will be located;

(C) To the maximum extent feasible, the design of the improvements, the materials and the mechanical equipment to be used, and the siting of the structures shall be consistent with effective energy conservation design principles; and
(D) The design provides for a cost effective use of grant funds in order to achieve affordable housing costs for agricultural households.
(b) A major deficiency in meeting one or more of the listed site or design criteria may result in the Department's rejection of an application.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7212. Priorities in Use of Funds.
(a) Special consideration may be given to housing developments which meet one or more of the following criteria:
(1) The plan for development or rehabilitation provides for ownership or eventual ownership by agricultural employees, including ownership of shares in a cooperative housing corporation.
(2) The housing development is intended for year-round occupancy rather than seasonal use.

(3) The housing development conforms with the Statewide Housing Plan and the Farmworker Housing Assistance Plan.
(4) The number of dwelling units projected to be occupied by agricultural households will be large in relation to the total amount of grant funds requested.
(5) The plan for development provides for rehabilitation of existing housing provided that the total development cost of rehabilitation compares favorably with the cost of new construction for a comparable facility.
(6) The plan for development or rehabilitation provides that some or all of the housing units of the housing development will be accessible and adaptable to the needs of the elderly or disabled.
(7) There are social and economic factors associated with the housing development such as:
(A) The housing development is intended to serve households with the greatest need for government assistance in obtaining adequate and affordable housing.

(B) Labor and economic development programs and any other relevant programs will be utilized.
(C) Other significant social or economic aspects merit special considerations.
(8) There is an urgent need for housing in the area where the housing development will be located because of health and safety factors.
(9) The housing development will utilize solar and other alternative energy efficient systems.
(10) The housing development will utilize manufactured housing or other cost-efficient design or construction techniques for the purpose of making housing affordable to lower-income households.
(b) The priority criteria are not quantified and are of equal value.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Sections 50007.5 and 50517.5, Health and Safety Code.








s 7214. Grant Committee.
(a) All non-emergency grants, amendments to grants, and major amendments to conditions affecting grants require prior approval by the grant committee at a duly convened meeting of the committee. In addition, any substantial amendments to the requirements of this subchapter or major policy decisions respecting program operation, shall be approved at such a meeting.
(b) The grant committee shall consist of members and shall operate as set forth in Subchapter 1 (commencing with Section 6900) of Chapter 6.5 of Part 1 of Title 25, California Administrative Code.
(c) Grant proposals that are eligible for funding but are not considered for approval because of the unavailability of funds will be considered at the next committee meeting at which funds are available and will be judged with other grant applications considered at that meeting.
(d) The grant committee may establish limitations as to the total amount, in dollars, of grants it may approve at any meeting.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7216. Application Process.
(a) An applicant seeking a grant must submit a Grant Application to the Department.
(b) Applications for grant funds will be reviewed by Department staff which shall advise the grant committee on proposed projects.
(c) A summary of all completed applications will be submitted to the Grant Committee for approval or rejection.
(d) All applicants shall be notified of the date, time and place of the grant committee meeting and of the applicant's right to attend such meeting.
(e) Applicants will be notified in writing of the action of the committee.
(1) If the committee approves the application for a grant, the letter to the applicant will contain the procedures, requirements, and any special conditions needed for grant closing.
(2) If the committee rejects the application, the letter will inform the applicant of the reasons for the rejection and of its right to appeal the decision.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7218. Contents of Grant Applications.
(a) The contents of the grant application and necessary supporting documents will vary with the source of the matching share which the applicant will use to finance the proposed housing development.
(b) Use of FmHA, CHFA or Other Department Funds. If the applicant will use FmHA, CHFA or other Department program loans or grants as all or part of its matching share, the applicant shall submit with its application the following:
(1) A copy of the preliminary or final application, as the case may be, it has submitted for such matching funding;
(2) A resolution authorizing the application for the grant with original signatures of the authorized officials of the applicant organization; and
(3) Other materials as required by the Department in the application instructions.
(c) Use of Other Matching Funds. If the applicant will not be using FmHA, or CHFA or other Department program funds as its matching share, the applicant shall submit with its application a copy of the following documents:
(1) A description of the proposed site and available utilities;
(2) A description of the proposed improvements;
(3) A plot plan and detailed plans and specifications;
(4) A detailed cost breakdown for such items as land acquisition, site development, construction (including rehabilitation), equipment, utility connections, financing, fees and furnishings if such are to be included;

(5) Information regarding the financing of the housing development including the amount of grant needed and the source and amount of the matching share;
(6) Information on the method of construction or rehabilitation and on the architectural, engineering and legal services to be provided including copies of any contracts for the provisions of these services;
(7) Satisfactory evidence of review and approval by the required state and local officials;
(8) A market analysis which supports the need for the proposed housing and includes the characteristics of the persons eligible for occupancy including income and estimates of the number of eligible occupants willing and able to occupy the proposed housing;
(9) Income ranges of the agricultural households to be served;
(10) Existing or proposed legal composition of the applicant, including its articles of incorporation or enabling resolution of operating authority, its bylaws, and a list of directors or commissioners, when applicable;

(11) Current financial statement for cooperative or nonprofit organization applicants;
(12) A description and justification of any related facilities to be financed by the grant;
(13) A satisfactory survey of the land;
(14) A resolution authorizing the application for the grant with original signatures of the authorized officials of the applicant organization; and
(15) Other materials as required by the Department in its application instructions.
(d) Cooperative and Rental Housing applications should also include:
(1) Detailed operating budgets for the first year's operation and for a typical year's operation that include:
(A) Allowance for vacancies and non-payment of rents or fees;

(B) Allowances for accumulation of a reserve account as required by Section 7234; and
(C) Separate listings of all applicable federal, state and local taxes.
(2) Narrative statements of the proposed manner of managing the housing and information on the qualifications of the management staff.
(3) A statement of policy regarding management and operation including method of tenant selection, proposed lease and grievance procedures, and proposed rules and regulations for the housing development.
(4) A schedule of proposed rents or cooperative housing fees which indicates that the monthly shelter costs for assisted units will be affordable by low income agricultural households as provided in Section 7204(b).
(e) Homeownership Applications shall also include:
(1) Information regarding the financing of the individual dwelling units including the amount of grant needed and the source and amount of matching share; and
(2) A breakdown of the pro rata share of the grant which will be applied to each assisted dwelling unit and the criteria used to make such a determination.
(f) The Director may waive any requirement of this section provided that he/she has determined that the submittal of such information at the time of grant application is unnecessary for adequate evaluation of the feasibility of a proposed housing development.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7220. Grant Cancellation.
(a) After notice has been given to the grantee and other parties with an interest in the housing development, a grant may be cancelled. Cancellation may occur after a grant has been approved but before any disbursements have been made or after partial disbursement of the grant, if the following occur:
(1) The objectives for which the grant is made cannot, for any reason, be met; or
(2) Alternative sources of matching financing cannot be obtained by the grantee; or
(3) The grantee has not abided by the conditions of the Agreement to Enter a Grant Agreement, the Grant Agreement or other agreements executed with the Department.
(4) The grantee has failed to execute required agreements or to provide necessary documentation within a reasonable time period prescribed by the Department.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7222. Environmental Clearances.
(a) Whenever a proposed housing development is a project which potentially may have a significant impact on the environment and is not categorically exempt, grantees will be responsible for supplying in a timely and responsive way all data and information to all public agencies that have the primary responsibility for complying with requirements of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA).
(b) Program applicants for projects subject to CEQA shall provide the Department with assurances of compliance with CEQA.
(c) Grantees which are local public entities shall act as lead agency for projects subject to CEQA unless another public entity has assumed the role of lead agency.
The activities of the Department regarding implementation of CEQA shall be governed by Subchapter 3 of Chapter 6.5 of Title 25, California Administrative Code (Sections 6940 et seq.).


Note: Authority cited: Section 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7224. Coordination with Federal Agencies.
(a) Grantees which will utilize federal assistance, such as loans and/or grants from FmHA, as their matching share, shall submit promptly to the Department copies of all letters from the federal agencies that have a bearing on the housing development.
(b) The department will work with the federal agencies to ensure a coordinated approach to processing and approving applications for housing developments.
(c) In the event a conflict exists between federal and state regulations, the Department shall yield to the federal regulations insofar as not prohibited by State law or the legitimate interests of the State.
(d) The Department always maintains the right to monitor housing developments assisted by its grant in areas of concern to the Department.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 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. It shall require that a lien be placed on the real property of the housing development 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 forty (40) years for new rental construction and new cooperative construction, and a term of twenty (20) years for all other construction. 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 and cooperative 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.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7228. Conveyance of the Housing Development.
The following provisions govern the sale or conveyance of the housing development, or any part thereof.
(a) Conveyance to Agricultural Households for the Purpose of Homeownership. If the grantee intends to sell or convey all or a portion of the housing development to individual agricultural households for the purpose of homeownership, the Department will authorize the sale or conveyance after the following conditions are met:
(1) Identification of Assisted Units. The grantee must identify any assisted units that will be located in the conveyed portion(s) of the housing development.
(2) Allocation of Grant Funds. For each assisted unit identified, the grantee shall specify in monetary terms the portion of the grant funds that will be used to reduce the costs of acquiring ownership of the assisted unit by an agricultural household.
(3) Subsequent Grant Agreement. Prior to or concurrently with the sale or conveyance of an assisted unit, the grantee shall ensure that a representative of the agricultural household which will own the assisted unit executes a Subsequent Grant Agreement with the Department which shall be in a form prescribed by the Department and contain the following conditions:
(A) It shall be binding upon the agricultural household for a term of twenty (20) years.
(B) It shall require the members of the agricultural household to reside in the assisted unit for the duration of the Subsequent Grant Agreement.
(C) It shall contain the following conditions with respect to the sale or conveyance of an assisted unit by the agricultural household.
1. If an assisted unit is sold or conveyed within a period of 10 years from the date of execution of the Subsequent Grant Agreement, an amount equal to the sum allocated to the assisted unit pursuant to subdivision (a)(2) of this section shall be paid to the Department.
2. If an assisted unit is sold or conveyed more than ten years after the date of execution of the Subsequent Grant Agreement, the Department shall be repaid an amount equal to the sum allocated pursuant to subdivision (a)(2) of this section minus 10% of that amount for each additional year that the agricultural household occupies the assisted unit beyond the tenth year.
3. The Department shall determine whether or not any amounts subject to repayment to the Department, as specified above, will be assigned to the new owner in lieu of repayment to the Department.
4. The Subsequent Grant Agreement shall terminate after the grant funds have been repaid to the Department and the assisted unit has been sold or conveyed.
(4) Recordation of the Subsequent Grant Agreement. The grantee shall cause the Subsequent Grant Agreement and other pertinent documents to be recorded in the official records of the county in which the housing development is located.
(5) Subsequent Lien. The grantee shall ensure that a lien in favor of the Department is placed against any assisted unit to secure performance of the conditions of the Subsequent Grant Agreement. The lien shall endure for the duration of the Subsequent Grant Agreement and shall be subject to the provisions of Section 7230.
(6) Sale of Non-assisted Units. After the total number of assisted units has been determined, the Department shall approve the sale or conveyance of any housing units not identified as assisted units and shall, at the time of sale or conveyance, release any such units from the lien securing performance of the Grant Agreement. The grant shall not be used to reduce the acquisition cost of a non-assisted unit.
(7) Termination of Grant Agreement. The Department shall terminate the Grant Agreement and the lien securing its performance after sale or conveyance of all of the assisted units if all of the conditions of the Grant Agreement have been satisfied, as determined by the Department.

(8) The Department may charge an administrative fee for its costs in processing a Subsequent Grant Agreement.
(b) Conveyance For Continued Agricultural Households Occupancy. If the grantee intends to sell or convey the housing development to an entity that will continue to use the development to provide housing for agricultural households, the Department will authorize the sale or conveyance provided that:
(1) The successor in interest to the grantee agrees to assume the obligations of the grantee, including the assumption of the conditions and obligations specified in the Grant Agreement between the grantee and the Department.
(2) The successor in interest agrees to take title to the housing development subject to the lien securing the Grant Agreement between the grantee and the Department in accordance with Section 7230.
(3) The successor in interest agrees to an extension of the duration of the Grant Agreement and lien where the Department has determined that such an extension would be in the best interest of the continued operation of the housing development.

(4) The successor in interest has demonstrated to the satisfaction of the Department that it can adequately operate the housing development in accordance with the requirements of the program and meet its obligations under the Grant Agreement.
(c) Conveyance For Use Other Than Agricultural Household Occupancy. The grantee shall not sell or convey the housing development to an entity that will not continue to use the development to provide housing for agricultural households in accordance with program requirements unless the Department has approved such sale or conveyance. The Department will approve a sale or conveyance provided that the grantee has demonstrated to the satisfaction of the Department that good cause exists for terminating the operation of the housing development as provided in Section 7236; and the grantee repays the state the full amount of the grant.


Note: Authority cited: Sections 50402, 50406 and 50517.5(d)(5), Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7230. Lien.
The following provisions shall govern liens concerning the real property of the housing development:
(a) Original Lien. Contemporaneously with the disbursement of the initial funds to a grantee, the Department shall cause to be recorded, in the office of the county recorder of the county in which the assisted real property is located, notice of the lien securing the Grant Agreement.
(1) The notice of the lien shall be indexed by the recorder in the Grantor Index to the name of the grantee and in the Grantee Index to the name of the State of California, Department of Housing and Community Development.
(2) The notice of the lien shall refer to the Grant Agreement which the lien secures.
(3) The notice of the lien shall include a legal description of assisted real property that is subject to the lien.
(b) Subsequent Lien. Contemporaneously with the conveyance of part of the housing development to an agricultural household for homeownership, the Department shall cause to be recorded, in the office of the county recorder the county in which the assisted real property is located, a notice of the lien securing the subsequent Grant Agreement.
(1) The notice of the lien shall refer to the Subsequent Grant Agreement for which the subsequent lien secures.
(2) The notice of the lien shall include a legal description of the assisted real property that is subject to the subsequent lien.
(3) The notice of the lien shall be indexed by the recorder in the Grantor Index to the name of the agricultural household, and in the name of the State of California, Department of Housing and Community Development.
(c) Assumption of Lien. Contemporaneously with the conveyance of the housing development by a grantee to its successor in interest as provided in Section 7228(b), the Department shall cause notice of the lien to be recorded and indexed as described in Subdivision (a) of this Section. The notice of the lien shall reflect the change in ownership of the housing development. The lien shall retain its priority as of the date it was recorded for the original grantee.
(d) Subordination of the Lien. The Department may execute and cause to be recorded in the office of the recorder of the county in which notice of the lien has been recorded, a subordination of the lien, provided that any subordination of the Lien shall not jeopardize the security interest of the state and shall further the interest of farmworker housing. The recitals contained in such subordination shall be conclusive in favor of any bona fide purchaser or lender relying thereon.
(e) Termination of the Lien. The lien shall endure until released by the Director of the Department pursuant to the terms set forth for the termination of the Grant Agreement.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7232. Grant Disbursements.
(a) Grant funds shall only be disbursed for payment of obligations which are due or for reimbursement of expenditures previously approved by the Department.
(b) The grantee must request disbursements of grant funds on a form prescribed by the Department and such requests must be in accordance with authorized amounts set forth in the budget approved by the Department. With the prior approval of the Department, the grantee may transfer any allocations or portions thereof set forth in the approved budget to other allocated items of said budget.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7234. Operation of Rental and Cooperative Housing Developments.
Except as otherwise explicitly set forth in this section, operation requirements shall refer to the entire development and all units therein, rather than only to the assisted portion:
(a) Occupancy Restrictions. The grantee shall maintain the housing development so that assisted units shall only be occupied by agricultural households in accordance with the provisions of Section 7208(g)(3).
(b) Operating Reserves. Operating reserves for a housing development shall be established as required by Section 8308. The Department, at its discretion, may allow the use of the grant funds to satisfy part or all of this requirement.
(c) Replacement Reserve. Replacement reserves for a housing development shall be established as required by Section 8309.
(d) Housing Costs. The Department will approve a schedule of rents or cooperative housing fees as may be necessary to provide occupants of the housing development with affordable housing costs to the extent consistent with the maintenance of the fiscal integrity of the housing development and the requirements of other agencies which have financed the housing development.
(1) The grantee shall not increase the rent or cooperative housing fees on any unit of the housing development without the prior permission of the Department, which shall be given if the grantee demonstrates that such increase is required to defray necessary operating costs or to avoid jeopardizing the fiscal integrity of the housing development and that such increase complies with the procedures and limits required by the federal or other state agencies which have financed the housing development.
(e) Occupancy Rules. Documents, including rental agreements, governing, tenant occupancy of the housing development shall be subject to approval by the Department.
(f) Bilingual Services. The grantee shall provide bilingual services and publications to the occupants of the housing development, as appropriate.
(1) If requested, the Department will provide grantees technical assistance in meeting this obligation.
(g) Maintenance. The grantee shall maintain the housing development in a way which protects the public interest and the health, safety and welfare of its occupants, and the secured interest of the Department.
(h) Right of Inspection. The Department may, through its agents or employees, with prior notice enter upon and inspect the lands, buildings, and equipment of the grantee, including books and records, at any time before, during or after the construction or rehabilitation of the housing development.
(1) The Department shall neither enter or inspect any unit which is occupied, whether or not the occupant is present, without the prior consent of the occupant.

(2) After inspection of the housing development, the Department may require such repairs or corrections as may be necessary to protect the public interest or the health, safety, or welfare of the occupants of the housing development.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7236. Termination of Grant Agreement.
(a) A grantee may terminate a Grant Agreement upon request provided that the grantee repays the Department the full amount of the grant and the Department has determined that one or more of the following or similar circumstances has occurred which makes the continued operation of the housing development in compliance with Program requirements no longer feasible:
(1) The employment of agricultural workers has greatly decreased in the area.
(2) A sufficient number of agricultural workers and their families in fact do not apply to live in the housing development.
(3) The dwelling units of the housing development are no longer suitable because of design, size, or age, for the housing needs of the agricultural workers and their families employed in the area.
(4) The grantee's continued operation of the housing development is no longer financially feasible and the grantee has demonstrated to the satisfaction of the Department that it has made a good faith effort to convey the housing development in accordance with Section 7228(b).


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7238. Disposition of Recaptured Grant Funds.
All funds, including interest therefrom, repaid to the Department because of termination, sale, conveyance, default, recapture or any other reason, will be deposited in the Farm Worker Housing Grant Fund.


Note: Authority cited: Sections 50402, 50406 and 50517.5(b), Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7239. Uniform Multifamily Underwriting and Program Rules.
(a) The following sections of title 25, Division 1, Chapter 7, Subchapter 19 are hereby incorporated by reference into this subchapter and shall apply to rental housing developments receiving assistance from the Farmworker Housing Grant Fund.
(1) Section 8302. Restrictions on Demolition;
(2) Section 8303. Site Control Requirements.

(3) Section 8304. Unit Standards;
(4) Section 8305. Tenant Selection;
(5) Section 8306. Tenant Recertification and Unit Mix Maintenance;
(6) Section 8307. Rental Agreement and Grievance Procedure;
(7) Section 8310. Underwriting Standards;
(8) Section 8311. Limits on Development Costs;
(9) Section 8312. Developer Fee.
(10) Section 8313. Reserved.
(11) Section 8314. Use of Operating Cash Flow.
(12) Section 8315. Subordination Policy.
(13) Section 8316. Leasehold Security.
(b) For purposes of this section 7239 and subsections (b) and (c) of section 7234, the definitions found in Section 8301 shall apply.
(c) In the event of a conflict between the provisions of Subchapter 19 and this Subchapter 3, the provisions of this Subchapter 3 shall prevail.


Note: Authority cited: Sections 50402 and 50406, Health and Safety Code. Reference: Section 50517.5, Health and Safety Code.








s 7270. Definitions.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50852-50857, Health and Safety Code.








s 7272. Criteria for Eligibility.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50853, 50855 and 50858, Health and Safety Code.








s 7274. Eligible Use of Funds.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50853 and 50855, Health and Safety Code.








s 7275. Security.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50856 and 50857, Health and Safety Code.








s 7276. Term.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Section 50587, Health and Safety Code.








s 7278. Loans in Excess of $200,000.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Section 50857, Health and Safety Code.








s 7280. Interest Rate.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50855 and 50857, Health and Safety Code.








s 7282. Loan Repayment.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50856 and 50857, Health and Safety Code.








s 7284. Application Requirements.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50853, 50857 and 50858, Health and Safety Code.








s 7286. Application Process.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50855 and 50857, Health and Safety Code.








s 7288. Project Selection.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50855 and 50857, Health and Safety Code.








s 7290. Legal Documents.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Section 50856, Health and Safety Code.








s 7292. Disbursement of Loan Funds.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50856, Health and Safety Code.








s 7294. Amendment to Agreements.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Sections 50856, Health and Safety Code.








s 7296. Termination of Agreements.


Note: Authority cited: Section 50857, Health and Safety Code. Reference: Section 50856(a), Health and Safety Code.








s 7300. Purpose and Scope.
(a) These regulations implement and interpret Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31, Health and Safety Code, which establishes the Multifamily Housing Program.
(b) These regulations establish terms, conditions and procedures for funds awarded after the effective date of these regulations.


Note: Authority cited: Sections 50406(n), 50675.1(c) and 50675.11, Health and Safety Code. Reference: Sections 50406 and 50675, Health and Safety Code.








s 7300.1. Uniform Multifamily Underwriting and Program Rules.
(a) Subchapter 19 of Title 25, Division 1, Chapter 7 (commencing with Section 8300) is hereby incorporated by reference into this subchapter and shall apply to rental housing developments receiving assistance under the Multifamily Housing Program.
(b) In the event of a conflict between the provisions of Subchapter 19 and this Subchapter 4, the provisions of this Subchapter 4 shall prevail.


Note: Authority cited: Sections 50406(n), 50675.1(c) and 50675.11, Health and Safety Code. Reference: 50675.1, 50675.2, 50675.4, 50675.5, 50675.6, 50675.7 and 50675.8, Health and Safety Code.








s 7301. Definitions.
In addition to the definitions found in Chapter 2 (commencing with Section 50050), of Part 1 of Division 1 of the Health and Safety Code, and Health and Safety Code Section 50675.2, the following definitions and those found in the Uniform Multifamily Regulations (Chapter 7, subchapter 19, Section 8301) shall apply to this subchapter. In the event of a conflict between the following definitions and those cited above, the following definitions prevail for the purposes of these regulations. The defined terms will be capitalized as they appear in the regulation text. References to code sections refer to sections of these regulations unless otherwise noted:
(a) "Affordable Rents" means Rents established for Assisted Units in accordance with Section 7312.
(b) "Area Median Income" means the most recent applicable county median family income published by TCAC.
(c) "Article XXXIV" means the Article of the California Constitution (Health and Safety Code Section 37000) that requires advance voter approval of certain publicly funded low-rent housing Projects.
(d) "Disabled Household" means a household in which a member has an orthopedic disability impairing personal mobility or a physical disability affecting his or her ability to obtain employment, or in which a person requires special care or facilities in the home. "Disabled Household" also includes a household in which a member has a developmental disability specified in subdivision 4512(a) of the Welfare and Institutions Code, or a mental disorder, which would render him or her eligible to participate in programs of rehabilitation or social services conducted by or on behalf of a public agency, or a single person with such a developmental disability or mental disorder.
(e) "Efficiency Unit" means a Dwelling Unit containing only one habitable room. A room in a structure that is a single-family house at the time of application will not be considered to be an Efficiency Unit eligible for program funds.
(f) "Eligible Households" means households whose incomes do not exceed the income limits specified by TCAC or other, lower income limits agreed to by a Project Sponsor and the Department. In non-Special Needs Population Projects, household income will be calculated on the basis of Units in accordance with TCAC rules and procedures. In Special Needs Populations Projects, household income may be calculated on the basis of bedrooms within a single-family house and bedrooms within an apartment Unit, provided all Project Units are located on the same parcel or on contiguous parcels and the bedrooms are: (1) occupied by a single individual who is a member of a Special Needs Populations, or an individual member of a Special Needs Populations and his or her relatives or caretaker and (2) subject to an individual rental or occupancy agreement. In transitional Special Needs Populations Projects, household income may be calculated on the basis of each occupant of each bedroom provided all Project Units are located on the same parcel or on contiguous parcels and no more than 2 unrelated persons are occupying a bedroom.
(g) "Fiscal Integrity" means that the total Operating Income plus funds released pursuant to the Regulatory Agreement from the operating reserve account is sufficient to: (1) pay all current Operating Expenses; (2) pay all current debt service (excluding deferred interest); (3) fully fund all reserve accounts (other than the operating reserve account) established pursuant to the Regulatory Agreement; and (4) pay other extraordinary costs permitted by the Regulatory Agreement. The ability to pay any or all of the permitted annual Distributions shall not be considered in determining Fiscal Integrity.
(h) "Fund" means the Housing Rehabilitation Loan Fund established pursuant to Section 50661 of the Health and Safety Code.
(i) "Initial Operating Year" means the initial period of operation of the Rental Housing Development, beginning at the time of the initial occupancy of the completed Project and ending on the last day of the fiscal year for the development.
(j) "Manager's Unit" means a Unit in which the on-site manager of the Project resides. A Manager's Unit will not be considered to be an MHP Assisted Unit, nor will it be considered to be a Restricted Unit for the purpose of calculating allowable Distributions. A Manager's Unit will be considered to be a Restricted Unit for the purpose of allocating development costs and may qualify for a loan amount up to the amount applicable to the 60% of AMI level.
(k) "Nonprofit Corporation" means the same as defined in Section 50091 of the Health and Safety Code.
(l) "Refinance" means to pay off all or a portion of existing debt secured by the Project with the proceeds of a Program loan or other financing also secured by the Project.
(m)
(n) "Rehabilitation" means the term as defined in Section 50096 of the Health and Safety Code, including improvements and repairs made to a residential structure acquired for the purpose of preserving its affordability.
(o) "Rent" means the same as "gross Rent," as defined in the Internal Revenue Code (26 USC 42(g)(2)(B). It includes all mandatory charges, other than deposits, paid by the tenant for the use and occupancy of an Assisted Unit, plus a utility allowance established in accordance with TCAC regulations. For Units assisted under the HUD Section 8 or similar rental subsidy program, Rent includes only the tenant contribution portion of the contract rent.
(p) "Rent-Up Costs" means costs incurred in connection with marketing and preparing an Assisted Unit for occupancy while the Unit is on the housing market but not yet rented to its first tenant.
(q) "Residential Hotel" means any building that contains 6 or more Residential Hotel Units, where a majority of the Units are Residential Hotel Units. Single-family houses are not considered Residential Hotels.
(r) "Residential Hotel Unit," also referred to as a single room occupancy Unit or an SRO, means an Efficiency Unit that: (1) is occupied as a primary residence, and (2) is subject to state landlord-tenant law pursuant to Chapter 2 (commencing with Section 1940) of Title 5 of Part 4 of Division 3 of the Civil Code. The term also includes a Unit in an "SRO Project" as described in California Code of Regulations, Title 4, Section 10325(g)(3).
(s) "Special Needs Populations" means Disabled Households, agricultural workers, single-parent households, survivors of physical abuse, homeless persons or persons at risk of becoming homeless, chronically ill persons including those with HIV and mental illness, displaced teenage parents (or expectant teenage parents), homeless youth as defined in Government Code section 11139.5, individuals exiting from institutional settings, chronic substance abusers, or other specific groups with unique housing needs as determined by the Department. "Special Needs Populations" do not include seniors or the frail elderly unless they otherwise qualify as a Special Needs Population.
(t) "State Median Income" means the most recent total median family income for California issued by the federal Department of Housing and Urban Development ("HUD"). For the purposes of assigning point scores andestablishing income limits for Assisted Units, State Median Income percentages will be expressed as a percentage of Area Median Income rounded up to the next highest five percent increment as calculated annually by the Department. (continued)