Section 50532 Of Chapter 3.5. Predevelopment Loans From California Health And Safety Code >> Division 31. >> Part 2. >> Chapter 3.5.
50532
. The fund shall be administered by the director and any
persons within the department designated by the director, in
accordance with all of the following requirements:
(a) The department shall not commit more than 20 percent of the
total moneys appropriated to the fund to any single borrower at any
point in time.
(b) The department shall require adequate security for all loans
made from the fund. For the purposes of this subdivision, "adequate
security" includes, but need not be limited to, a security interest
in any property purchased with fund moneys, a promissory note, or an
assignment of a land option, except that in the case of Indian trust
land a mortgage on a leasehold interest in the property shall be
acceptable.
(c) No predevelopment loan may be made pursuant to this chapter
unless the department may reasonably anticipate that a commitment can
be obtained by an eligible sponsor for construction financing or
long-term financing that will permit occupancy primarily by persons
of low income, as specified in subdivision (b) of Section 50531. The
department may make land purchase loans to eligible sponsors to
enable those sponsors to exercise options or to purchase land on
which no option can be obtained even though the sponsor is not able
at the time the loan is made to proceed with the development of
assisted housing on the purchased site. If the eligible sponsor is
unable to proceed with the development of assisted housing on the
purchased site within three years of its acquisition, the sponsor,
upon demand of the department, shall convey the site to the
department. The department shall dispose of the site in accordance
with subdivision (o) of Section 50406, and the net proceeds shall be
paid into the fund.
(d) The department may establish alternate project selection
processes, threshold requirements, and priorities for funds
appropriated for special purposes. These alternate processes,
requirements, and priorities shall be tied to the specific needs and
objectives for which the funds have been appropriated.
(e) The department shall, from time to time, direct the Treasurer
to invest moneys of the fund which are not required for its current
needs in eligible securities which the department designates from
among those specified in Section 16430 of the Government Code. The
department may direct the Treasurer to deposit moneys from the fund
in interest-bearing accounts in state or national banks or other
financial institutions having principal offices in this state. The
department may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment pursuant to
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4 of Title 2 of the Government Code. All interest,
dividends, and pecuniary gains from those investments or deposits
shall accrue to the fund.
(f) In complying with Section 50408, the department shall also
report annually to the Legislature and the Governor on the
administration of the fund. The report shall include, but need not be
limited to, all of the following information:
(1) The number of units assisted.
(2) The average income of households assisted and the distribution
of annual incomes among assisted households.
(3) The rents in assisted units.
(4) The number and amount of loans made to each eligible sponsor
in the preceding year.
(5) Data on the number of delinquencies and defaults.
(6) Recommendations, as needed, to improve the operation of the
fund.
(7) The number of loans made at interest rates lower than 7
percent per annum, and the income of households assisted by those
loans.
(8) The public transportation services conveniently available to
assisted households.
(9) The number of manufactured housing units assisted under
Section 50531 and this section.
(10) The location, size, and cost of land, and option rights
purchased with land purchase loans.
(g) (1) Except as provided in paragraph (2), the balance of any
loan made from the fund or its predecessor fund which remains unpaid
on September 22, 1983, except any portion which is delinquent, and
all loans made from the fund on or after that date, shall bear
interest at a rate of 3 percent per annum.
(2) The department may reduce or eliminate interest on the loans,
if, in the exercise of sound discretion, the department determines
that action is necessary for the provision of decent housing to very
low income households, as described in Section 50105. However, if the
department eliminates interest on a loan, it shall charge a loan
origination fee not to exceed 2 percent of the loan amount.
(h) To the extent feasible, the department shall ensure a
reasonable geographic distribution of the funds. Other things being
equal, the department shall give priority to assisting development
that meets either of the following requirements:
(1) It will be located in public transit corridors.
(2) It will be used for the preservation and acquisition of
existing government-assisted rental housing at risk of conversion to
market-rate use. Within this category, the department shall give
priority to those applications that include matching financing from
local redevelopment agencies or federal programs.
(i) The department may make predevelopment loans or land purchase
loans for the development of mobilehome parks and manufactured
housing subdivisions.