Loading (50 kb)...'
(continued)
(d) "Assisted units" means units purchased or rehabilitated with a loan funded pursuant to this subchapter. Assisted units shall also include units occupied by a seeker successfully matched to a homeowner provider under a shared housing local program or a household provided with self-help technical assistance in a project funded pursuant to this subchapter.
(e) "Back-end ratio" means the ratio between monthly household income and monthly housing costs plus all payments on long-term installment debt.
(f) "Borrower" means a homebuyer(s) or existing homeowner(s) who has or will receive a CalHome Program loan made from a local program funded pursuant to this subchapter, signs the promissory note, and is or will be the homeowner of the property being financed.
(g) "Community revitalization" A program or project will be considered to contribute towards community revitalization if all units to be assisted with CalHome Program funds are, or will be, located within a federally defined Qualified Census Tract or a designated redevelopment area under the jurisdiction of a local redevelopment agency.
(h) "Construction skills training program" means an existing program that trains youth 16 to 24 years old in construction skills.
(i) "Department" means the Department of Housing and Community Development.
(j) "Developer" means a locality or nonprofit corporation that owns the project land, obtains the project financing and develops the homeownership project.
(k) "Developer borrower" means a developer who receives a CalHome loan pursuant to this subchapter for the development of a project involving multiple homeownership units.
(l) "Eligible household" means a low- or very low-income household that is: a first-time homebuyer; an existing owner-occupant of property in need of rehabilitation; a homeowner participant in a shared housing local program; or a first-time homebuyer participant in a self-help construction project. The eligible household shall occupy, or intend to occupy, the property as their principal residence and shall not lease or rent the property (except in the case of a homeowner provider assisted through a CalHome shared housing program in renting a room in their home to a seeker).
(m) "First-time homebuyer" means a borrower(s) who has not owned a home during the three-year period before the purchase of a home with CalHome assistance, except that the following individual or individuals may not be excluded from consideration as a first-time homebuyer under this definition:
(1) a displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two years, worked on a full-time basis as a member of the labor force for a consecutive twelve-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family;
(2) a single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; or
(3) an individual or individuals who owns or owned, as a principal residence during the three-year period before the purchase of a home with CalHome assistance, a dwelling unit whose structure is:
(A) not permanently affixed to a permanent foundation in accordance with local or state regulations; or
(B) not in compliance with state, local, or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure.
(n) "Front-end ratio" means the ratio between monthly household income and monthly housing cost, including first mortgage principal, interest, taxes and insurance.
(o) "Grant" means an award of funds made from the Department to eligible localities or nonprofit corporations to operate local programs or to provide self-help technical assistance to a project pursuant to this subchapter. In the case of a development loan, the portion of that loan which is used to provide mortgage assistance to qualified first-time homebuyers is converted to a grant.
(p) "Gross income" means all income as defined in California Code of Regulations (CCR) Title 25, Section 6914.
(q) "Homebuyer education" means a specific course of instruction, designed pursuant to Section 7722, to educate first-time homebuyers regarding various aspects of purchasing and maintaining a home.
(r) "Homeowner provider" means a low-income person(s) currently residing in a home they own and occupy as a principal place of residence, who desires to find a tenant to share their residence.
(s) "Homeownership" means:
(1) for mortgage assistance: fee simple title on real property or a leasehold interest on real property that enables the lessee to make improvements on and encumber the property and has a term sufficient to secure the CalHome loan, ownership of a manufactured housing unit located on a rented space in a mobilehome park; or
(2) for owner-occupied rehabilitation: fee simple title; or a leasehold interest that enables the lessee to make improvements on and encumber the property and has a term sufficient to secure the CalHome loan; or ownership of a manufactured housing unit located on a rented space in a mobilehome park.
(3) a share interest in a limited equity housing cooperative; or
(4) an interest in a mutual housing project that meets the definition in Section 7716(gg).
(t) "Homeownership development project" means new construction on a site, including subdivisions, or scattered sites, that is under common ownership, development financing and construction.
(u) "Household" means one or more persons occupying the same housing unit.
(v) "Loan-to-value-ratio" means the ratio between the amount of all indebtedness liened, or to be liened, against a property and the appraised value of the property securing the liens.
(w) "Local public agency", or "locality" means a city, county, or city and county, or a local public entity within the state of California that has been delegated substantially all of the locality's housing functions (hereinafter collectively referred to as a "locality"). For the purpose of this definition, "housing functions" means engaging in or assisting in the development or operation of housing for persons of low or moderate income. Such delegation shall have been made prior to the issuance of the Notice of Funding Availability under which the local public entity is applying.
(x) "Local program" means a first-time homebuyer mortgage assistance loan program or an owner-occupant rehabilitation loan program to provide CalHome Program loans for the acquisition and/or rehabilitation of property; or a shared housing program operated by a locality or nonprofit corporation pursuant to the provisions of this subchapter.
(y) "Lower-or low-income household" means the same as defined in Section 50079.5 of the Health and Safety Code.
(z) "Manufactured housing" means a mobilehome as defined by Section 18007 of the Health and Safety Code. A manufactured home can be either in a rental mobile home park, on leased land, or on property owned by the occupant. It can either be on a permanent foundation or a foundation system. In these regulations, with respect to manufactured housing not installed on a permanent foundation, terms that typically apply to conventionally constructed housing or to loans secured by real property shall be given the appropriate analogous meaning used in the manufactured housing industry. For example, rather than holding fee title to the property, a manufactured home owner is listed as the registered owner on the certificate of title issued by the Department.
(aa) "Maximum Sales Price/Value Limit" is the maximum allowable sales price or the maximum after-rehab value of a home assisted with a CalHome Program loan. This shall be set at 100% of the current median sales price of a single family home in the county in which the CalHome Program or project is located.
(bb) "Monthly housing cost" means the average of the estimated costs for the next twelve months for a homebuyer or owner-occupant and shall include all of the following associated with that housing unit:
(1) principal and interest on a mortgage loan including any rehabilitation loans, and any mortgage insurance fees associated therewith;
(2) property taxes and assessments;
(3) fire and casualty insurance, including flood insurance when applicable, covering replacement value of property improvements;
(4) homeowner association fees or dues, if applicable;
(5) lease payments, if the housing unit is situated on leased land; and
(6) space rent, if a manufactured housing unit is situated in a mobilehome park.
(cc) "Mortgage" means a deed of trust which is used to secure a lien on real property or, in the case of manufactured housing, a security instrument sufficient to legally perfect a security interest in the home.
(dd) "Mortgage assistance" means permanent financing used toward homebuyer costs, up to a maximum limit as specified in the Department's NOFA. Another term for mortgage assistance is "downpayment assistance".
(ee) "Mortgage financing" means a long-term, permanent loan, provided by a mortgage lender, which is secured by a deed of trust, or, in the case of manufactured housing, a security instrument sufficient to perfect a security interest in the home.
(ff) "Mortgage lender" means a bank or trust company, mortgage banker, mortgage broker, federal or state chartered savings and loan association, State or Federal governmental agency or credit union whose principal business is to originate, process, close and service loans for the purchase or development (if appropriate) of property. "Mortgage lender" also includes nationwide institutions whose primary purpose is to develop housing and provide first mortgage financing to low-income purchasers of the developed housing.
(gg) "Mutual housing" means a multi-unit homeownership development that allows each resident a vested financial interest that has a determinable market value, is divisible and gives the owner an exclusive right to occupy a designated unit for an indefinite period.
(hh) "NOFA" is the acronym for Notice of Funding Availability. The NOFA is the document used by the department to announce that funds are available and applications may be submitted.
(ii) "Nonprofit corporation" means a corporation as defined in Section 50091 of the Health and Safety Code.
(jj) "Recipient" means a locality or nonprofit corporation that receives an award of funds from the CalHome Program.
(kk) "Refinance" means to pay off all or a portion of existing debt secured by the property from the proceeds of a CalHome Program loan or other financing also secured by the property.
(ll) "Rehabilitation" means, in addition to the definition in Health and Safety Code, Section 50096 and Section 50097, repairs and improvements to a manufactured home necessary to correct any condition causing the home to be substandard pursuant to CCR, Title 25, Section 1704. Rehabilitation includes reconstruction. Rehabilitation also includes room additions to prevent overcrowding. Rehabilitation also means repairs and improvements which are necessary to meet any locally-adopted standards used in local rehabilitation programs. Rehabilitation does not include replacement of personal property.
(mm) "Reuse account" means an account established pursuant Section 7724.
(nn) "Rural area" means the same as defined in Health and Safety Code, Section 50101.
(oo) "Seeker" means a person who desires to be placed as a tenant in a home that is owner-occupied.
(pp) "Self-help construction" means owner-building as defined in Health and Safety Code, Section 50692 and may include mutual self-help housing as defined in Health and Safety Code, Section 50692(b).
(qq) "Self-help technical assistance" means conducting and administering a project of technical or supervisory assistance, which will aid eligible households in carrying out owner-builder housing efforts.
(rr) "Shared housing" means a local program designed to preserve homeownership by matching a homeowner provider with a seeker.
(ss) "Shared housing match" means a seeker who has been successfully placed as a tenant into the residence of a homeowner provider.
(tt) "Shared housing technical assistance" means the provision of services required to match a homeowner provider with a seeker.
(uu) "Site control" means control of a parcel of real property as described in Section 7744.
(vv) "Standard Agreement" means the contract entered into between the Department and a Recipient pursuant to Section 7752(a).
(ww) "Volunteer labor" means skilled or unskilled construction labor provided without remuneration.
Note: Authority cited: Sections 50406(n), 50650.2 and 50650.7, Health and Safety Code. Reference: Sections 50650.3, 50650.4, 50650.5 and 50650.7, Health and Safety Code.
s 7717. General Applicant Eligibility Requirements.
(a) Geographic Restrictions:
(1) A locality shall only be eligible to apply for an award of CalHome funds for a local program or project located within its jurisdictional boundaries.
(2) A nonprofit corporation shall only be eligible to apply for an award of CalHome funds for a program or project within a county in which it has developed a project or operated a housing program within the past four years or in a county for which the nonprofit corporation has an existing 523 Self-Help Technical Assistance Grant Agreement with United States Department of Agriculture (USDA).
(b) Stability and capacity:
(1) To be eligible for funding, the applicant shall demonstrate to the Department's satisfaction that it has sufficient organizational stability and capacity to carry out the activity for which it is requesting funds.
(2) In order to demonstrate organizational stability, the applicant shall have been operating as a housing developer or housing program administrator for a minimum of two years prior to the date of application.
(3) A nonprofit corporation must be a corporation whose exempt purposes for the two years prior to the date of application have included the activity for which it is applying.
(4) A nonprofit corporation shall also demonstrate financial stability to the Department's satisfaction through audited financial statements submitted for Department review as part of its application for funding.
(5) An applicant shall also meet the additional stability and capacity requirements set forth in these regulations for the specific activity for which it is applying.
Note: Authority cited: Sections 50406(n), 50650.2 and 50650.7, Health and Safety Code. Reference: Sections 50650.3, 50650.4, 50650.5 and 50650.7, Health and Safety Code.
s 7718. Eligible Activities.
(a) The Department may make grants to localities or nonprofit corporations to fund local programs undertaking:
(1) provision of CalHome Program loans to first-time homebuyers for mortgage assistance;
(2) provision of CalHome Program loans to owner-occupants for rehabilitation, including rehabilitation of manufactured homes not on a permanent foundation;
(3) provision of technical assistance to self-help housing projects in which the applicant organization will be directly providing the services required in Section 7738, Self-Help Project Administration Assistance Requirements; or
(4) provision of technical assistance for shared housing programs for which the applicant organization will be directly providing the services required in Section 7741, Shared Housing Program Administration Requirements.
(b) The Department may make construction period loans to localities or nonprofit corporations for development of new homeownership projects or make permanent loans for mutual housing and limited equity housing cooperatives.
(c) Proposed development projects shall be ineligible to receive funding if construction work has begun or will begin prior to the date that the Department makes an award of program funds. "Construction work" includes: grading; site preparation (with the exception of demolition or clearing of property); or site improvements intended for public dedication.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3, Health and Safety Code.
s 7719. Eligible and Ineligible Uses of Funds.
(a) Eligible uses of funds for specific activities are set forth in the article dealing with that activity.
(b) CalHome funds shall not be used for any of the following costs that may be incurred in the local program or the project.
(1) Refinancing of existing loans with CalHome funds, except CalHome funds may be used for site acquisition bridge loans with a term of thirty-six (36) months or less on homeownership development projects.
(2) Costs associated with the rehabilitation or repair of property owned by a mobilehome park owner.
(3) Offsite improvements (improvements outside the boundaries of the subdivision or individual parcels for scattered site development).
(4) Unit construction costs, except in owner-occupied rehabilitation local programs.
(5) Recurring loan closing costs.
(6) Payoff of all or any portion of a borrower's consumer debt, liens or judgments.
(7) Self-help technical assistance grant funds may not be used to pay for purchase of land, materials, tools and construction equipment or for any costs of construction.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code
s 7720. Eligible Households.
To be eligible to receive the benefits of CalHome funding, an individual household shall:
(a) be a lower-income household, when considering the gross income of all household residents eighteen (18) years old or older. For shared housing match services, where the provider is elderly, the income of non-occupying children who are on title will not be counted;
(b) include as borrowers on the CalHome Program promissory note all persons who will be or are on title to the property; and
(c) either:
(1) in the case of a rehabilitation loan or if receiving shared housing match services, be an owner-occupant and intend to continue occupying the home as a principal place of residence; or
(2) in the case of a mortgage assistance loan or if receiving self-help technical assistance services, be a first-time homebuyer and intend to occupy the home as a principal place of residence.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650(c) and 50650.3, Health and Safety Code.
s 7721. Local Program/Project Administration.
(a) The Recipient shall implement the local program or project and be responsible for the following activities:
(1) marketing the local program or project;
(2) determination of a household's income-eligibility pursuant to the income requirements of this subchapter;
(3) where applicable, based on the nature of the local program or project, compliance with the following requirements:
(A) Section 7722 homebuyer education requirements;
(B) Section 7723 loan servicing requirements;
(C) Section 7724 reuse account requirements;
(D) Section 7730 mortgage assistance requirements;
(E) Section 7731 mortgage assistance underwriting requirements;
(F) Section 7734 owner-occupied rehabilitation requirements;
(G) Section 7735 owner-occupied rehabilitation underwriting and construction requirements;
(H) Section 7738 self-help technical assistance requirements; and
(I) Section 7741 shared housing technical assistance requirements.
(4) for mortgage assistance or owner-occupied rehabilitation loans, disbursing funds on behalf of borrowers at time of property acquisition or during rehabilitation;
(5) maintaining complete and accurate records of all CalHome Program loan disbursements and repayments to ensure adherence to proper accounting procedures for the CalHome Program loans, which may be verified by the Department and may be subject to a fiscal and programmatic audit;
(6) complying with reporting requirements pursuant to Section 7754; and
(7) complying with all other locality and/or nonprofit corporation requirements as set forth in these regulations and all applicable Federal and State regulations.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b), 50650.4 and 50650.7, Health and Safety Code.
s 7722. Homebuyer Education Requirements.
(a) Homebuyer education shall be provided to all homebuyers receiving a CalHome mortgage assistance loan and to all self-help participants being assisted under a CalHome self-help technical assistance grant. For each home purchase completed by an assisted household, the CalHome program shall provide a grant of up to a maximum amount as published in the latest NOFA per assisted household toward the cost of the homebuyer education, provided the following conditions are met:
(1) homebuyer education curriculum shall be pre-approved by the Department and at a minimum, shall include the following topics;
(A) preparing for homeownership
(B) available financing and credit analysis;
(C) loan closing and homebuyer responsibilities;
(D) home maintenance and loan servicing;
(2) a certificate of successful completion of homebuyer education shall be issued to each prospective homeowner and a copy submitted to the Department.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7723. Loan Servicing Requirements.
(a) Recipients shall develop and employ a loan servicing plan that has been submitted to and approved by the Department as addressing the following topics:
(1) Process for monitoring the requirement of owner-occupancy,
(2) Annual review of hazard and flood insurance,
(3) Timely payment of property taxes and assessments,
(4) Accounting for repayment of CalHome Program loans,
(5) Properly calculating payoffs,
(6) Processing demands,
(7) Reconveyance of deeds of trust,
(8) Collection of CalHome Program notes in default or foreclosure,
(b) If loan servicing will be performed under a contract with a third party, that third party must be in the business of performing loan servicing; and
(c) Recipients shall be required to enter into a long term monitoring agreement with the Department allowing Department monitoring of loan servicing for compliance with these regulations.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b), 50650.4 and 50650.7, Health and Safety Code.
s 7724. Reuse Account.
(a) CalHome Recipients shall develop and employ a reuse account plan that has been submitted to and approved by the Department as addressing the following topics:
(1) Description of a tracking system to ensure the reuse of funds for eligible activities including;
(A) Loans to individual homeowners and homebuyers,
(B) CalHome loan processing, housing rehabilitation processing, homebuyer education and other eligible activity delivery fees, and;
(C) Allowable 5% loan servicing fee.
(b) All repayments of CalHome Program loan principal and any CalHome Program loan interest shall be deposited into a separately maintained reuse account.
(c) Any interest earned on deposited CalHome reuse funds must accrue to the CalHome identified funds and be reused for CalHome purposes.
(c) Funds in the reuse account shall only be used by the Recipient for CalHome Program eligible activities.
(d) Recipients shall be required to enter into a long term monitoring agreement with the Department allowing Department monitoring of reuse accounts for compliance with these regulations.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7725. Maximum Homeowner/Homebuyer Loan Amounts.
(a) CalHome Program loans to individual borrowers shall not exceed the amount published in the current NOFA or, when considered with other available financing and assistance, the minimum amount necessary:
(1) in the case of first-time homebuyer mortgage assistance, to ensure affordable monthly housing costs as defined by the first mortgage lender.
(2) in the case of owner-occupant rehabilitation, to fund eligible rehabilitation costs only, in accordance with program requirements.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7726. Homeowner/Homebuyer Loan Terms.
(a) CalHome Program loans shall be secured by the property or leasehold interest, as applicable.
(b) The lien securing repayment of the CalHome Program loan shall be subject only to liens, encumbrances and other matters of record reviewed and approved by the Recipient responsible for underwriting the CalHome Program loan.
(c) Homeowner/Homebuyer CalHome Program loans shall have the following terms and conditions:
(1) principal and interest payments shall be deferred for the term of the CalHome Program loan;
(2) loans shall be repayable upon sale or transfer of the property, when the property ceases to be owner-occupied, or upon the CalHome Program loan maturity date; However, if it is determined by the recipient that repayment of the CalHome Program loan at the maturity date causes a hardship to the borrower, the recipient has two other options. They are:
(A) Amending the note and deed of trust to defer repayment of the amount due at loan maturity, that is the original principal and the accrued interest, for up to an additional 30 years (at 0% additional interest), this may be offered one time, or;
(B) Converting the debt at loan maturity, that is the original principal balance and any accrued interest, to an amortized loan, repayable in 15 years at 0% additional interest.
(3) loans are not assumable;
(4) the following transfers of interest shall not require the repayment of the CalHome Program loan:
(A) transfer to a surviving joint tenant by devise, descent, or operation of law on the death of a joint tenant;
(B) a transfer, in which the transferee is a person who occupies or will occupy the property, which is:
(i) a transfer where the spouse becomes an owner of the property;
(ii) a transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an owner of the property; or
(iii) a transfer into an inter vivos trust in which the borrower is and remains the beneficiary and occupant of the property;
(5) the term for first-time homebuyer mortgage assistance CalHome Program loans shall be thirty (30) years with the following exception: when United States Department of Agriculture, Rural Housing Service (USDA-RHS) 502 mortgage loans are in first lien position, the term shall be the term of the 502 mortgage (30 to 38 years);
(6) the term for owner-occupied rehabilitation CalHome Program loans shall be a maximum of thirty (30) years as determined by the Recipient; and
(7) a borrower may pay the CalHome Program loan amount, in part or in whole, at any time without penalty.
(d) All CalHome assistance to individual households shall be made in the form of a loan. Recipients may make CalHome Program loans bearing simple interest up to three percent per annum, and may allow forgiveness of all or a portion of the accrued interest as part of its local program design. Loan principal shall not be forgiven, except as allowed by statute. In lieu of making loans bearing a fixed rate of interest, recipients may instead charge contingent deferred interest in the form of shared net appreciation as set forth in subsection (e).
(e) Shared net appreciation is allowed, only as follows:
(1) gross appreciation is calculated by subtracting the original sales price from the current sales price or the current appraised value if the loan accelerating event is other than sale of the property;
(2) net appreciation is calculated by subtracting the seller's applicable closing costs, seller's cash contribution in the original purchase transaction, the value of seller's sweat equity, if applicable, and the documented value of capital improvements from the gross appreciation amount;
(3) the recipient may only claim repayment of the principal, interest and a portion of the net appreciation. That maximum portion of the net appreciation which may be claimed by the recipient is equal to the percentage of the value of the residence financed by the CalHome Program loan. That is, if the loan equals twenty percent (20%) of the initial value of the residence, a maximum of twenty percent (20%) of the appreciation may be charged by recipient.
(f) In any loan transaction where the CalHome Program loan is the only subsidy, the borrower cannot be restricted from selling the home at its fair market value at any time.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7727. Homeowner/Homebuyer Loan-to-Value Limits.
(a) The loan-to-value ratio for a mortgage assistance CalHome Program loan, when combined with all other indebtedness to be secured by the property, shall not exceed one hundred (100) percent of the sales price plus a maximum of up to five (5) percent of the sales price to cover actual closing costs.
(b) The loan-to-value ratio for an owner-occupied rehabilitation CalHome Program loan, when combined with all other indebtedness secured by the property, shall not exceed one hundred-five (105) percent of the after-rehabilitation value estimated pursuant to Section 7735(b)(1).
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7728. Eligibility Requirements.
In addition to the requirements of Section 7717, to be eligible to apply for CalHome funding for a mortgage assistance program, the applicant shall have successfully administered a homebuyer program for a minimum of two years within the four years immediately preceding the application.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.4, Health and Safety Code.
s 7729. Eligible Costs.
CalHome funds in support of a mortgage assistance program shall be used only for the following costs:
(a) Mortgage assistance for permanent financing of :
(1) a dwelling unit ready for occupancy; or
(2) a unit acquired by a loan such as a HUD FHA 203(k) loan. This includes self-help housing mortgage assistance, except that CalHome permanent financing may be disbursed at time of lot purchase where the self-help housing is being financed under the U. S. Department of Agriculture, Rural Housing Service 502 program;
(b) Homebuyer education, which will be reimbursed in the form of a grant from the Department to the Recipient in an amount not to exceed the maximum published in the current NOFA.
(c) Non-recurring loan closing costs.
(d) A CalHome loan-processing activity delivery fee not to exceed the maximum amount published in the current NOFA will be reimbursed in the form of a grant from the Department to the Recipient.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7730. Local Program Administration Responsibilities.
The recipient of CalHome funds to operate a local mortgage assistance program shall be responsible for the following activities:
(a) providing information and assistance to first-time homebuyers on obtaining maximum amount of first mortgage financing pursuant to the underwriting requirements in Section 7731;
(b) reviewing CalHome required appraisals for property eligibility under value limits established pursuant to Section 7731(b)(3). The appraised value shall not exceed these limits;
(c) in the case of acquisition of existing housing, the Recipient shall be responsible for inspection of properties to be purchased or a review of Uniform Residential Appraisal Reports, including the Valuation Conditions, to ensure that they conform to the requirements of State Housing Law (California Health and Safety Code, Section 17910 et seq.);
(d) ensuring completion by each assisted household of a homebuyer education class that meets the requirements of Section 7722; and
(e) originating, underwriting, packaging and closing CalHome Program loans in accordance with program requirements.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7731. Mortgage Assistance Underwriting Requirements.
(a) CalHome Recipients shall develop and employ Mortgage Assistance Program Underwriting Guidelines that have been submitted to and approved by the Department as addressing the following underwriting topics:
(1) establish front and back-end ratios used to qualify the borrower;
(2) what criteria will be used to determine the credit worthiness of the borrower;
(3) requirements for the first mortgage:
(A) Borrower shall obtain the maximum first lien mortgage loan with a term and interest rate from a mortgage lender consistent with affordable housing costs as defined in each program's guidelines.
(B) Mortgage loans shall not include provisions for negative amortization, principal increases, balloon payments or deferred interest
(4) financing subordinate to the CalHome Program loan:
(A) fees and/or charges for subordinate financing shall be reasonable loan origination fees for first mortgage financing as determined by the Department to be consistent with industry standards;
(B) there must not be a balloon payment due before the maturity date of the CalHome Program loan;
(C) all subordinate financing provided shall defer principal and interest payments for the term of the CalHome Program loan;
(b) Prior to close of escrow, the Recipient shall ensure that an appraisal has been obtained which meets the following requirements:
(1) the appraisal shall be prepared by a State-licensed, residential property appraiser;
(2) the appraisal shall use the sales of comparable properties approach to determine value; and
(3) maximum appraised home values at time of purchase or upon completion of acquisition/rehabilitation work shall not exceed the appraised value limit established by the Department and published in the NOFA.
(c) Cash out of escrow to borrowers are limited to the amount deposited into escrow by the borrowers and not needed for any lender-required minimum down-payment.
(d) Recipients must obtain title insurance in the amount of the CalHome Program loan at close of escrow.
(e) Fire insurance (and flood insurance where applicable) requirements are as follows:
(1) Recipient must require borrowers to maintain insurance on the property in an amount at least equal to the replacement value of the improvements; and
(2) Recipient must be named as additional loss payee on the policy.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7732. Eligibility Requirements.
In addition to the requirements of Section 7717, to be eligible to apply for CalHome assistance for an owner-occupied rehabilitation program, the applicant shall have successfully administered a local owner-occupied rehabilitation program for a minimum of two years within the four years immediately preceding the application.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.4 and 50650.7, Health and Safety Code.
s 7733. Eligible Costs.
CalHome funds in support of an owner-occupied rehabilitation program shall be used only for the following costs:
(a) Cost of rehabilitation of the property, as defined in Section 7716(ll).
(b) Cost of building permits and other related government fees.
(c) Cost of an appraisal, architectural, engineering, and other consultant services that are directly related to the rehabilitation of the property.
(d) Non-recurring loan closing costs.
(e) Replacement cost of a manufactured home not on a permanent foundation up to the maximum amount published in the current NOFA in the case where it has been determined by the Recipient it is infeasible to rehabilitate the home.
(f) A CalHome activity delivery fee in an amount not to exceed the maximum amount published in the current NOFA per assisted unit will be reimbursed in the form of a grant from the Department to the Recipient.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7734. Local Program Administration Requirements.
The recipient of CalHome funds for the operation of a local owner-occupied rehabilitation program shall be responsible for the following activities:
(a) reviewing CalHome required after-rehabilitation appraisals for property eligibility under value limits established in the current published NOFA;
(b) originating, underwriting, packaging and closing CalHome Program loans in accordance with program requirements; and
(c) completion of rehabilitation construction requirements pursuant to the Owner-Occupied Rehabilitation Program Guidelines required by Section 7735(a).
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7735. Underwriting and Construction Requirements.
(a) CalHome Recipients shall develop and employ Owner-Occupied Rehabilitation Program Guidelines submitted to and approved by the Department as addressing the following topics:
(1) owner-occupied rehabilitation underwriting guidelines including borrower credit requirements; and
(2) rehabilitation construction requirements.
(b) Prior to commencement of rehabilitation work, an appraisal shall be obtained with the following requirements:
(1) the appraisal may be prepared by Recipient's staff using the sales of comparable properties approach to determine value. If comparable sales are not available, the appraisal shall be prepared by a State-licensed, residential property appraiser;
(2) the appraisal shall take into consideration the estimated value of the rehabilitation work to be completed on the property and shall include the pre-rehabilitated value and the after-rehabilitated value; and
(3) An appraisal is not required in the case of rehabilitation work on a manufactured home not on a permanent foundation.
(c) Any cash out of escrow to borrowers is prohibited.
(d) Recipients must obtain title insurance in the amount of the CalHome Program loan at close of escrow.
(e) Fire insurance (and Flood insurance where applicable) requirements are as follows:
(1) Recipient must require borrowers to maintain insurance on the property in an amount at least equal to the replacement value of the improvements; and
(2) Recipient must be named as additional loss payee on the policy.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7736. Eligibility Requirements.
In addition to the requirements of Section 7717, to be eligible to apply for CalHome assistance for a self-help technical assistance project, the applicant shall meet the criteria set forth in the CCR, Title 25, Division 1, Chapter 7, Subchapter 6.5, Article 1, Section 7532 "Eligible Sponsors", and have successfully completed a minimum of two self-help, new construction projects within the four years immediately preceding the application.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b), 50650.4 and 50650.7, Health and Safety Code.
s 7737. Eligible Costs.
CalHome funds in support of a self-help technical assistance project shall be used only for the following costs:
(a) Costs for assistance, training and supervision on self-help construction activities and techniques.
(b) Homebuyer education, which will be reimbursed in the form of a grant from the Department to the Recipient in an amount not to exceed the maximum published in the current NOFA.
(c) Costs of assistance provided in project development which includes, but is not limited to, the preparation of contracts for professional services, application for project funding, packaging households' applications for assistance, preparation of subdivision maps, review of engineering plans and specifications for construction and rehabilitation projects and compliance with appropriate requirements of funding agencies and local government.
(d) Administrative costs of providing technical assistance for the project funded by the Department including, but not limited to, wages, salaries and fringe benefits of clerical and management personnel and payment for rent, utilities, communications, printing and travel expenses.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7738. Self-Help Technical Assistance Requirements.
(a) The recipient shall develop and employ Self-Help Technical Assistance Program Guidelines submitted to and approved by the Department as addressing the following topics:
(1) Program Marketing
(2) Recruitment of homebuyers and selection criteria
(3) Income limits for participation and income determination procedures
(4) Criteria for homebuyer participation in the program including:
(A) Residency requirements
(B) Credit requirements
(C) Process for determining participant's physical capability to assist in the construction of their home
(5) List of activities to be performed by self-help participants
(6) Construction training plan
(7) Homeownership training plan
(b) A home assisted with self-help technical assistance shall not be sold at a price that exceeds its appraised value;
(c) Prior to the disbursement of an advance, not to exceed twenty-five percent (25%) of the total grant amount, the recipient must submit a certification that the recipient does not have available funds to initiate the project.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7739. Eligibility Requirements.
In addition to the requirements of Section 7717, to be eligible to apply for CalHome assistance for a shared housing program, the applicant shall have successfully administered a shared housing program for a minimum of two years immediately preceding the application.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b), 50650.4 and 50650.7, Health and Safety Code.
s 7740. Eligible Costs.
CalHome shared housing technical assistance funds shall be used only for the following costs:
(a) Indirect costs of administering a shared housing local program, including the costs of providing information and referrals; outreach/marketing costs; program evaluation; and CalHome program reporting requirements; and/or
(b) Costs of direct services, including shared housing matching, documentation of match efforts, and match follow-up services.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7741. Program Administration Requirements.
(a) A shared housing technical assistance local program shall, at a minimum, include the following features:
(1) information regarding services available, procedures and program requirements, which shall be provided to all individuals requesting assistance;
(2) outreach and marketing activities shall be conducted to reach both potential homeowner providers and potential seekers and provide information about the availability, purpose and requirements of shared housing match services;
(3) program evaluations shall be obtained from clients (homeowner providers and seekers) by the shared housing technical services provider to be used as a basis for assessment and improvement of services provided to clients; and
(4) all services required to effect a shared housing match between a low-income qualified homeowner provider and a seeker which must include at minimum, intake forms/applications, face-to-face interviews between homeowner providers/seekers and shared housing agency staff, reference checks, and income determinations to determine homeowner provider eligibility;
(5) documentation of a minimum ten (10) percent reduction in housing costs (or increased income) for homeowner providers, except in instances where a homeowner provider is age sixty (60) or over or disabled and the seeker (renter) will be providing services to the homeowner provider. In cases that do not meet this requirement, the Recipient shall provide written justification; and
(6) match follow-up services to determine match satisfaction and to help clients maintain a successful shared housing match.
(b) A seeker may not be matched to a homeowner provider who rents out more than two rooms in their home.
(c) The aggregate annual CalHome reimbursement cannot exceed fifty (50) percent of the locality's or nonprofit corporation's annual budget for their shared housing match local program.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7742. Eligibility Requirements.
In addition to the requirements of Section 7717, to be eligible to apply for a development loan, an applicant shall have successfully developed a minimum of two similar projects within the last four years, and the applicant shall have staff that will be committed to the proposed project that possess the knowledge, skills and ability to perform the tasks required in a homeownership development project.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b), 50650.4 and 50650.7, Health and Safety Code.
s 7743. Eligible Costs.
CalHome funds in support of a development project shall be used only for the following costs:
(a) purchase of real property;
(b) building permits and state and local fees;
(c) predevelopment costs directly related to the single-family housing development;
(d) onsite improvements related to single-family housing development (within the boundaries of the subdivision or individual parcels for scattered site developments);
(e) carrying costs during construction, including insurance, construction financing fees and interest, taxes, and any other expenses necessary to hold the property while the single-family housing development is under construction;
(f) escrow, title insurance, recording and other related costs;
(g) costs for items intended to assure the completion of construction, such as contractor bond premiums;
(h) environmental hazard reports, surveys, and investigations; and
(i) payoff of bridge loan financing for site acquisition which has a term of thirty-six (36) months or less.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7744. Site Control.
To be eligible to apply for a homeownership development project loan, the applicant shall have site control of the proposed project property as evidenced by one of the following:
(a) fee simple title;
(b) an enforceable option to purchase, which shall extend, or may be extended, for a minimum of 120 days beyond the deadline for application submittal;
(c) a disposition and development agreement with a public agency;
(d) a sales contract, or other enforceable agreement for the acquisition of the property; or
(e) a leasehold interest, or an enforceable option to lease. The option to lease shall extend for a minimum of 120 days beyond the deadline for application submittal. The leasehold term must be for a minimum of 40 years. The leasehold must have provisions that enable the lessee(s) to make improvements on and encumber the property for a term sufficient to secure the CalHome lien; or
(f) other forms of site control that give the department equivalent assurance that the project will be able to proceed without inordinate delay.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Section 50650.3(b), Health and Safety Code.
s 7745. Maximum Development Loan Amount.
The maximum project development loan amount shall be published in the current NOFA.
Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
s 7746. Development Loan Terms.
(a) All CalHome Program development loans shall be secured by the project real property and improvements, subject only to liens, encumbrances and other matters of record which have been reviewed and approved by the Department on a case-by-case basis.
(b) The development loan term shall end no later than the date specified in the Standard Agreement.
(c) Principal and interest payments shall be deferred for the term of the development loan.
(d) Development loans shall be repayable at permanent closings of the individual homebuyer CalHome Program loans or at the development loan maturity date, whichever occurs first. The portion of development loan repayments that are used to provide mortgage assistance to qualified first-time homebuyers will be converted to a grant to the Recipient. The balance of the development loan will be repaid to the Department. (continued)