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. (a) Within its territorial jurisdiction, an agency may
determine the location and character of any residential construction
to be financed under this chapter and may make mortgage or
construction loans to participating parties through qualified
mortgage lenders, or purchase mortgage or construction loans without
premium made by qualified mortgage lenders to participating parties,
or make loans to qualified mortgage lenders, for financing any of the
following:
(1) Residential construction within a redevelopment project area.
(2) Residential construction of residences in which the dwelling
units are committed, for the period during which the loan is
outstanding, for occupancy by persons or families who are eligible
for financial assistance specifically provided by a governmental
agency for the benefit of occupants of the residence.
(3) To the extent required by Section 103A of Title 26 of the
United States Code, as amended, to maintain the exemption from
federal income taxes of interest on bonds or notes issued by the
agency under this chapter, residences located within targeted areas,
as defined by Section 103(b)(12)(A) of Title 26 of the United States
Code. Any loans to qualified mortgage lenders shall be made under
terms and conditions which, in addition to other provisions as
determined by the agency, shall require the qualified mortgage lender
to use all of the net proceeds thereof, directly or indirectly, for
the making of mortgage loans or construction loans in an appropriate
principal amount equal to the amount of the net proceeds. Those
mortgage loans may, but need not, be insured.
(b) (1) Not less than 20 percent (15 percent in target areas) of
the units in any residential project financed pursuant to this
section on or after January 1, 1986, shall be occupied by, or made
available to, individuals of low and moderate income, as defined by
Section 103(b)(12)(C) of Title 26 of the United States Code. If the
sponsor elects to establish a base rent for units reserved for lower
income households, the base rents shall be adjusted for household
size, as determined pursuant to Section 8 of the United States
Housing Act of 1937 (42 U.S.C. Sec. 1437f), or its successor, for a
family of one person in the case of a studio unit, two persons in the
case of a one-bedroom unit, three persons in the case of a
two-bedroom unit, four persons in the case of a three-bedroom unit,
and five persons in the case of a four-bedroom unit.
(2) Not less than one-half of the units described in paragraph (1)
shall be occupied by, or made available to, very low income
households, as defined by Section 50105. The rental payments for
those units paid by the persons occupying the units (excluding any
supplemental rental assistance from the state, the federal
government, or any other public agency to those persons or on behalf
of those units) shall not exceed the amount derived by multiplying 30
percent times 50 percent of the median adjusted gross income for the
area, adjusted for family size, as determined pursuant to Section 8
of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), or
its successor, for a family of one person in the case of a studio
unit, two persons in the case of a one-bedroom unit, three persons in
the case of a two-bedroom unit, four persons in the case of a
three-bedroom unit, and five persons in the case of a four-bedroom
unit.
(c) Units required to be reserved for occupancy as provided in
subdivision (b) and financed with the proceeds of bonds issued on or
after January 1, 1986, shall remain occupied by, or made available
to, those persons until the bonds are retired.
(d) (1) When issuing tax-exempt bonds for purposes of this
section, the regulatory agreement entered into by the agency shall
require that following the expiration or termination of the qualified
project period, except in the event of foreclosure and redemption of
the bonds, deed in lieu of foreclosure, eminent domain, or action of
a federal agency preventing enforcement, units required to be
reserved for occupancy for low- or very low income households and
financed or refinanced with proceeds of bonds issued pursuant to this
section on or after January 1, 2006, or refinanced with the proceeds
of bonds issued pursuant to Section 53583 of the Government Code or
any charter city authority on or after January 1, 2007, shall remain
available to any eligible household occupying a reserved unit at the
date of expiration or termination, at a rent not greater than the
amount set forth by the regulatory agreement prior to the date or
expiration or termination, until the earliest of any of the following
occur:
(A) The household's income exceeds 140 percent of the maximum
eligible income specified in the regulatory agreement for reserved
units.
(B) The household voluntarily moves or is evicted for "good cause."
"Good cause" for the purposes of this section, means the nonpayment
of rent or allegation of facts necessary to prove major, or repeated
minor, violations of material provisions of the occupancy agreement
which detrimentally affect the health and safety of other persons or
the structure, the fiscal integrity of the development, or the
purposes or special programs of the development.
(C) Thirty years after the date of the commencement of the
qualified project period.
(D) The sponsor pays the relocation assistance and benefits to
tenants as provided in subdivision (b) of Section 7264 of the
Government Code.
(2) As used in this subdivision, "qualified project period" shall
have the meaning specified in, and shall be determined in accordance
with the provisions of, subsection (d) of Section 142 of the Internal
Revenue Code of 1986, as amended, and United States Treasury
regulations and rulings promulgated pursuant thereto.
(3) The amendment to this subdivision made during the 2005-06
Regular Session of the Legislature that is set forth in paragraph (1)
is declaratory of existing law.
(e) This section shall become operative January 1, 1996.