SECTIONS 50660-50671.6 - California Statutes

HEALTH AND SAFETY CODE

SECTION 50660-50671.6

50660. The Legislature finds and declares that the rehabilitation
of existing housing is necessary to the continued viability of
neighborhoods, the elimination of health and safety hazards, the
prevention of the overcrowding and the continued availability of a
dwindling stock of low-cost housing. Economic conditions have not
provided sufficient incentive to home improvement and elimination of
substandard conditions, and financial assistance in the form of
deferred-payment rehabilitation loans is necessary for those owners
of residential real property who would otherwise be unable to obtain
sufficient public or private financing to bring their properties into
compliance with rehabilitation standards. Deferred-payment loans
provide a means of financing rehabilitation which the owner could not
otherwise afford. Such assistance is particularly necessary where
local agencies are undertaking concentrated or systematic enforcement
programs to require compliance with rehabilitation standards, and
where persons or families of low or moderate income are affected.

50660.5. (a) It is the intent of the Legislature to encourage local
governments to assist residents to repair and rebuild housing in a
cost-efficient and expeditious manner following a disaster. To this
end, the Legislature recognizes that local governments may enact
ordinances following disasters to expedite the permit process. These
ordinances may include, but not be limited to, ordinances waiving
fees and streamlining requirements affecting disaster-related
repairs.
(b) The Legislature finds and declares that homeowners and owners
of rental housing who apply for assistance pursuant to Sections
50662.7, 50671.5, and 50671.6 may be unable to utilize expedited
procedures or liberalized standards because loan approval and repair
may occur after the expiration of the local ordinance. It is,
therefore, the intent of the Legislature to encourage local
governments to extend the application of these local ordinances to
homeowners and owners of rental housing who are utilizing disaster
assistance programs, including the respective loan programs
authorized by Sections 50662.7, 50671.5, and 50671.6, so that housing
can be repaired or rebuilt in a cost-efficient and expeditious
manner.

50661. (a) There is hereby created in the State Treasury the
Housing Rehabilitation Loan Fund. All interest or other increments
resulting from the investment of moneys in the Housing Rehabilitation
Loan Fund shall be deposited in the fund, notwithstanding Section
16305.7 of the Government Code. Notwithstanding Section 13340 of the
Government Code, all money in the fund is continuously appropriated
to the department for the following purposes:
(1) For making deferred-payment rehabilitation loans for financing
all or a portion of the cost of rehabilitating existing housing to
meet rehabilitation standards as provided in this chapter.
(2) For making deferred payment loans as provided in Sections
50668.5, 50669, and 50670.
(3) For making deferred payment loans pursuant to Sections 50662.5
and 50671.
(4) Subject to the restrictions of Section 53131, if applicable,
for administrative expenses of the department made pursuant to this
chapter, Article 3 (commencing with Section 50693) of Chapter 7.5,
and Chapter 10 (commencing with Section 50775).
(5) For related administrative costs of nonprofit corporations and
local public entities contracting with the department pursuant to
Section 50663 in an amount, if any, as determined by the department,
to enable the entities and corporations to implement a program
pursuant to this chapter. The department shall ensure that not less
than 20 percent of the funds loaned pursuant to this chapter shall be
allocated to rural areas. For purposes of this chapter "rural area"
shall have the same meaning as in Section 50199.21.
(b) There shall be paid into the fund the following:
(1) Any moneys appropriated and made available by the Legislature
for purposes of the fund.
(2) Any moneys that the department receives in repayment of loans
made from the fund, including any interest thereon.
(3) Any other moneys that may be made available to the department
for the purposes of this chapter from any other source or sources.
(4) Moneys transferred or deposited to the fund pursuant to
Sections 50661.5 and 50778.
(c) Notwithstanding any other provision of law, any interest or
other increment earned by the investment or deposit of moneys
appropriated by subdivision (b) of Section 3 of Chapter 2 of the
Statutes of the 1987-88 First Extraordinary Session, or Section 7 of
Chapter 4 of the Statutes of the 1987-88 First Extraordinary Session,
shall be deposited in a special account in the Housing
Rehabilitation Loan Fund and shall be used exclusively for purposes
of Sections 50662.5 and 50671.
(d) Notwithstanding any other provision of law, effective with the
date of the act adding this subdivision, appropriations authorized
by the Budget Act of 1996 for support of the Department of Housing
and Community Development from the California Disaster Housing Repair
Fund and the California Homeownership Assistance Fund shall instead
be authorized for expenditure from the Housing Rehabilitation Loan
Fund.

50661.5. (a) There is hereby created in the State Treasury the
California Disaster Housing Repair Fund, into which shall be paid all
moneys appropriated by the Legislature pursuant to subdivision (b)
or transferred pursuant to subdivision (c) for housing repair loans
pursuant to Sections 50662.7, 50671.5, and 50671.6. All interest or
other increments resulting from the investment of moneys in the
California Disaster Housing Repair Fund shall be deposited in the
fund, notwithstanding Section 16305.7 of the Government Code.
Notwithstanding Section 13340 of the Government Code, all money in
that fund is continuously appropriated to the department for the
following purposes:
(1) For making deferred payment loans and predevelopment loans
pursuant to Sections 50662.7, 50671.5, and 50671.6.
(2) For related administrative expenses of the department.
(3) For related administrative expenses of any entity contracting
with the department, pursuant to Sections 50662.7, 50671.5, and
50671.6 in an amount, if any, as determined by the department, to
enable the entities to implement a program pursuant to those
sections.
(4) For providing loan guarantees for disaster-related loans made
by private institutional lending sources.
(b) There shall be paid into the fund the following:
(1) Any moneys appropriated and made available by the Legislature
for purposes of the fund.
(2) Any moneys transferred from the Special Fund for Economic
Uncertainties prior to July 1, 1996, pursuant to subdivision (c).
(3) Any other moneys which may be made available to the department
prior to July 1, 1996, for the purposes of this section from any
other source or sources.
(4) The director may authorize the sale of the beneficiary
interest of loans made pursuant to Section 50662.7. The proceeds from
that sale prior to July 1, 1996, shall be deposited into the
California Disaster Housing Repair Fund. Proceeds from that sale
after July 1, 1996, shall be deposited in the General Fund.
(c) (1) To the extent that funds are not available, the Department
of Housing and Community Development shall submit to the Department
of Finance, within 90 days after a disaster, a deficiency request
based on a minimum funding level based on a damage survey completed
by the California Emergency Management Agency and the Federal
Emergency Management Agency. The request shall distinguish between
owner-occupied housing of one to four units and rental housing of
five or more units.
(2) Upon receipt of the deficiency request from the Department of
Housing and Community Development pursuant to paragraph (1), the
Department of Finance shall make a funding determination and notify
the Legislature of the approval or disapproval of the deficiency
amount. Any deficiency amount approved shall distinguish between
owner-occupied housing of one to four units and rental housing of
five or more units.
(3) Any payments made pursuant to this subdivision from funds made
available under Section 50671.5 shall be matched by a corresponding
and equal payment from funds made available under Section 50671.6,
except that, upon the determination of the Director of Finance that
one of the two rental repair programs has excess funds, moneys from
that fund may be used for either of the other two disaster repair
programs.
(d) In the event of a natural disaster, as defined in Section
8680.3 of the Government Code, the Director of Finance may transfer
moneys from the Special Fund for Economic Uncertainties established
by Section 16418 of the Government Code to the California Disaster
Housing Repair Fund, provided the transfer is not made sooner than 30
days after notification in writing of the necessity therefor is
provided to the Joint Legislative Budget Committee.
(e) Notwithstanding any other provision of law, on or after July
1, 1996, the unencumbered fund balance and reserves shall be
transferred to the Housing Rehabilitation Loan Fund and subsequent
income and other resources payable pursuant to Sections 50662.7,
50671.5, and 50671.6, shall be deposited to the Housing
Rehabilitation Loan Fund, except that payments of principal and
interest on loans issued pursuant to Sections 50662.7, 50671.5, and
50671.6 shall be deposited in the General Fund.
(f) In making funds available to disaster victims pursuant to
Sections 50662.7, 50671.5, and 50671.6, the department shall impose a
one-year deadline for submission of applications.
(g) Any changes made on or after January 1, 1994, to any program
funded by the California Disaster Housing Repair Fund shall not apply
to applications submitted on or before December 31, 1993. The
department may administer the program in accordance with guidelines
until regulations are adopted.

50661.7. The Director of the Department of Housing and Community
Development may transfer moneys appropriated or otherwise made
available for the purposes of the programs established under Sections
50662.7 and 50671.5 between those programs when there is
insufficient funding to meet the loan demand in either of those
programs and an uncommitted funding balance in the other program.

50662. The department shall adopt regulations establishing terms
upon which deferred-payment rehabilitation loans may be made. The
amount of a deferred-payment rehabilitation loan shall in no case
exceed the costs of meeting rehabilitation standards. The amount,
when combined with other financing provided, shall in no case exceed
the combined costs of meeting rehabilitation standards and
refinancing existing indebtedness. Except for loans made to local
agencies pursuant to Section 50664, deferred-payment rehabilitation
loans shall bear interest at the rate of 3 percent per annum on the
unpaid principal balance. In the discretion of the department, which
may differentiate among the types of programs specified in Section
50663, such interest shall either be payable periodically as it
accrues during the term of the loan or payment of interest shall be
deferred until payment of the principal is due. However, regulations
of the department may provide for waiver of interest payments when a
local public entity or nonprofit corporation contracting pursuant to
Section 50663 remits to the department in advance on behalf of the
borrower a sum equal to not less than 15 percent of the original
principal balance, which may be in lieu of interest. The regulations
of the department may also provide for payment of interest as
accrued, in circumstances determined appropriate by the department to
serve the purposes of this chapter. In the case of a
deferred-payment rehabilitation loan to an elderly person who is the
owner of an owner-occupied one-to-four family residence, the note and
deed of trust securing the loan shall require payment of the
obligation upon transfer of the property. Notwithstanding any other
provisions of this chapter, the department may permit the making of a
deferred-payment rehabilitation loan to an elderly person of low
income who is the owner of an owner-occupied dwelling without
requiring that other financing be provided to the extent of the owner'
s ability to afford the cost of such other financing. In the case of
a deferred-payment rehabilitation loan to a nonelderly person who is
the owner of an owner-occupied one-to-four family residence, payment
shall be required after five years or upon transfer of the property,
whichever first occurs. However, the loan may be renewed for
additional five-year terms so long as the property is not transferred
and the owner is unable to refinance the obligation when the debt
comes due. In the case of a deferred-payment rehabilitation loan to
an owner of a residence other than an owner-occupied one-to-four
family residence, payment shall be required after five years unless
it is determined by the department that a longer term is required to
ensure the economic feasibility of obtaining other rehabilitation
financing or accepting subsidies. The loan may be renewed for up to
five additional five-year terms so long as persons of low income
residing in the residence will benefit. The department shall
establish standards and determine eligibility for renewal.
Regulations of the department shall permit the assumption of a
deferred-payment rehabilitation loan authorized by this section when
the property which has been rehabilitated by such loan is transferred
to a person who meets the eligibility requirements of this section,
as determined by the department.

50662.2. Deferred-payment loans may be made to finance actual costs
incurred to meet rehabilitation standards for rehabilitation of
mobilehome parks, as defined in Section 18214, for occupancy by lower
income households.

50662.5. For the purpose of providing disaster relief to those
owners of owner-occupied single-family dwellings that were damaged or
destroyed as a result of the Los Angeles-Whittier Narrows Earthquake
on October 1, 1987, or subsequent aftershocks, resulting in a state
of emergency proclaimed by the Governor pursuant to Section 8625 of
the Government Code, financial assistance may be provided to disaster
victims as prescribed in this chapter under the following special
conditions, which shall prevail over conflicting provisions of this
chapter and administrative regulations:
(a) The loans shall be provided in the counties proclaimed by the
Governor to be in a state of disaster (1) to persons who do not
qualify for loan assistance from an agency of the United States for
rehabilitation of the damage caused by the earthquakes of October
1987, (2) to the extent that federally provided or assisted financing
may be insufficient to accomplish the necessary rehabilitation, and
(3) to the extent required to enable the recipient to obtain and
afford loan assistance from an agency of the United States to finance
the necessary rehabilitation. The loans shall be made only to
households that are victims of the earthquakes specified in this
section and only to the extent that other federal, state, local, or
private resources are not available or do not provide the assistance
or coverage needed to rehabilitate or reconstruct their homes.
(b) The loans shall be for the purpose of rehabilitating,
including reconstruction, of single-family dwellings that are
owner-occupied or would be owner-occupied but for the damage caused
by the earthquake or earthquakes.
(c) The maximum loan amount shall not exceed twenty thousand
dollars ($20,000), except that the department may waive this
limitation in individual cases to permit compliance with health and
safety standards or to restore the dwelling to a condition
substantially similar to its condition prior to the earthquakes.
(d) The loan, together with any existing indebtedness encumbering
the security property, shall not exceed 100 percent of the
after-rehabilitation value of the property, except that the
department may waive this limitation in individual cases to permit
compliance with health and safety standards or to restore the
dwelling to a condition substantially similar to its condition prior
to the earthquakes.
(e) The department shall impose no income criteria or other means
test as a prerequisite to obtaining a loan under this section.
(f) Repayment of the principal amount of a loan under this section
and interest thereon shall not be required until the borrower
transfers ownership of the rehabilitated property. Payments of
principal and interest on the loans shall, notwithstanding Section
50661, be deposited in the General Fund.
(g) The adoption by the department of rules for implementation of
this chapter shall not be subject to Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
(h) No commitments of loan funds under this section may be made
after December 31, 1990.
(i) Section 50668 does not apply to loans made pursuant to this
section.

50662.7. For the purpose of providing disaster relief to those
owners of owner-occupied dwellings that were damaged or destroyed as
a result of a natural disaster defined by Section 8680.3 of the
Government Code, resulting in a state of emergency proclaimed by the
Governor pursuant to Section 8625 of the Government Code, financial
assistance may be provided to disaster victims as prescribed in this
chapter under the following special conditions, which shall prevail
over conflicting provisions of this chapter and administrative
regulations:
(a) (1) The loans shall be provided in any city, county, or city
and county proclaimed by the Governor to be in a state of disaster:
(A) to persons who do not qualify for loan assistance from an agency
of the United States for repair of the damage caused by a natural
disaster, (B) to the extent that federally provided or assisted
financing may be insufficient to accomplish the necessary repair, and
(C) to the extent required to enable the recipient to obtain and
afford loan assistance from an agency of the United States to finance
the necessary repair.
(2) The loans shall be made only to households that are victims of
a natural disaster and only to the extent that other federal and
state resources, private insurance proceeds, or private institutional
lending sources, are not available or do not provide the assistance
or coverage needed to rehabilitate or reconstruct their homes.
(3) This subdivision shall not be construed to prevent the
processing of a loan application once a person or household has
received loan approval from a federal, state, or private
institutional lending source, nor shall this subdivision be construed
to prevent the funding of short-term loans until other federal,
state, or private loan proceeds become available.
(4) In allocating grants and loans, the department shall in no
event provide a loan to a family with an annual income in excess of
150 percent of statewide median income, adjusted for family size.
This paragraph shall apply to any disaster that occurs on or after
January 18, 1994.
(b) (1) The loans shall be for the purpose of repairing, including
reconstructing, dwellings that are owner-occupied or would be
owner-occupied but for the damage caused by the natural disaster and
for rental dwelling units of one to four units. Loan funds shall be
used to fund work necessary to repair damaged dwellings and to
correct serious, life-threatening violations of the state or local
building code or housing standards that are required to be corrected
prior to occupancy, including ensuring compliance with applicable
seismic safety standards and related property improvements or to
finance the reconstruction of dwellings destroyed as a result of the
natural disaster up to a maximum of fifty thousand dollars ($50,000)
per unit. The department shall limit the square footage of units
repaired or reconstructed using funds provided pursuant to this
section to the predisaster size of the unit.
(2) In the case of manufactured housing or mobilehomes, loan funds
shall be used to bring the manufactured home or mobilehome into
compliance with the standards set forth in Chapter 4 (commencing with
Section 18025) of Part 2 of Division 13.
(3) For the purposes of this section:
(A) "Owner-occupied dwellings" include single-family units,
attached owner-occupied units, condominiums, townhouses,
cooperatives, and manufactured homes, including mobilehomes.
(B) "Rental dwelling of one to four units" includes single-family
units, condominiums, townhouses, cooperatives, duplexes, and
manufactured homes, including mobilehomes.
(c) The loan, together with any existing indebtedness encumbering
the secured property, shall not exceed the after-repair value of the
property, except that the department may waive this limitation in
individual cases to ensure, when necessary, correction of serious,
life-threatening violations of the state or local building code or
housing standards, seismic safety standards, and general property
improvements relating to these standards pursuant to subdivision (b).
(d) (1) The outstanding balance of a loan provided under this
section, including principal and accrued interest thereon, shall be
due and payable, after 30 years or when either of the following
occurs: (A) the borrower transfers ownership of the rehabilitated
property, or (B) fails to occupy the rehabilitated property as his or
her principal place of residence, whichever comes first. For rental
dwellings, the term of the loan shall be 20 years.
(2) After the initial recordation of the deed of trust securing
the department's loan, the department shall not subordinate its deed
of trust to additional or other financing except in cases of extreme
hardship necessary to protect the health or safety of the occupants
or to the extent that the total principal of loans senior to the
department's loan is unchanged or decreased and the department's
security interest is not jeopardized, as determined by the
department.
(e) The department may make loans directly to borrowers, or
contract for the administration under this section of loans with one
or more entities that it determines to have the necessary experience
to successfully administer the loan program, including, but not
limited to, local public agencies and private organizations. The
department may authorize, under that contract, the payment of
expenses incurred by the entities in administering the loan program
and may prescribe the conditions pursuant to which the entities shall
administer the loans.
(f) Sections 50663 and 50668 do not apply to loans made pursuant
to this section.
(g) The department may set aside or use funds that are made
available for the purposes of this section for the purpose of curing
or averting an owner's default on the terms of any loan or other
obligation where that default would jeopardize the department's
security in the owner-occupied housing assisted pursuant to this
section. The payment or advance of funds by the department pursuant
to this subdivision shall be exclusively within the department's
discretion, and no person shall be deemed to have any entitlement to
the payment or advance of those funds. The amount of any funds
expended by the department pursuant to this subdivision shall be
added to the loan amount secured by the deed of trust and shall be
payable to the department upon demand.
(h) Any rule, policy, or standard of general application employed
by the Department of Housing and Community Development in
implementing this section shall not be subject to the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
(i) Fund allocations made pursuant to this section shall not be
subject to review or approval by the Loan Committee of the Department
of Housing and Community Development operating pursuant to
Subchapter 1 (commencing with Section 6900) of Chapter 6.5 of Title
25 of the California Code of Regulations.
(j) (1) In order to be eligible for one or more loans pursuant to
this section, the borrower shall agree to all of the following
conditions:
(A) All buildings shall be connected to their foundation systems
as necessary to meet the seismic requirements of the 1973 Edition of
the Uniform Building Code of the International Conference of Building
Officials in a manner approved by the department, which may include
seismic strengthening of foundation cripple walls and affixing or
bolting sill plates to the foundation.
(B) All water heaters shall be braced, anchored, or strapped to
resist falling or horizontal displacement due to earthquake motion.
(C) Hazard insurance shall be obtained and maintained as required
by the department.
(2) As a condition of receipt of assistance under this section,
owners of rental dwellings shall agree, in writing, to all of the
restrictions set forth in this subdivision.
(3) The loan shall include an amount sufficient to meet the
requirements of subparagraphs (A) and (B) of paragraph (1).
(k) Initial rents for rental housing rehabilitated under this
section shall not exceed the rent charged immediately prior to the
natural disaster. The department may allow for adjustments to the
predisaster rents due to cost-of-living increases or increases
necessary for debt service.
( l) The department shall adopt regulations establishing terms and
conditions upon which repair loans may be made. These regulations
shall be made available to the public by the department. The
department may set interest rates for individual loans for each
disaster at a rate that shall not exceed the rate for veterans' home
loans established pursuant to Section 987.87 of the Military and
Veterans Code on the date the Governor declares a state of emergency
for that disaster, plus up to one-half percent for administrative
costs not included in the interest rate. The Department of Housing
and Community Development shall prepare an annual audit of
administrative costs for the Department of Finance. All loans for
each disaster shall bear the same interest rate. The department may
also require periodic payments of interest, or principal and
interest, or provide incentives for earlier repayment of principal
and interest on owner-occupied dwellings. Incentives may include
reduction of interest rates to a minimum of 3 percent for repayment
that occurs within three years of the closing of the loan.
(m) Prior to full loan approval, the department may make loans not
exceeding five thousand dollars ($5,000) per loan to pay for the
costs of predevelopment activity which must be undertaken prior to
making eligible repairs if, in the opinion of the department, the
borrower is unable to pay for these costs in advance of full loan
approval. These loans shall bear interest at the rate of 6 percent
simple interest per annum and shall be evidenced by a promissory note
secured by a deed of trust. At the time of full loan approval, the
predevelopment loan shall be canceled, and the principal amount of
the loan and all accrued interest shall be included in the amount of
the full loan and shall be subject to the same interest rate and
terms and conditions as the full loan. For purposes of computing the
maximum loan amount, the amount of any predevelopment loan shall be
included.

50662.8. (a) Notwithstanding paragraph (1) of subdivision (d) of
Section 50662.7, the department may allow the assumption of any loan
made pursuant to subdivision (b) of that section for owner-occupied
dwellings subject to all of the following conditions:
(1) The original borrower dies.
(2) The assumption is by a member of the original borrower's
household and is a spouse, domestic partner, or child of the original
borrower.
(3) The person assuming the loan has legal ownership of the home.
(4) The person assuming the loan will continuously reside in the
home as his or her principal place of residence and will not transfer
the home to any other person or entity. If the person assuming the
loan moves to another residence or transfers the home to any other
person or entity, the loan shall become immediately due and payable.
(5) The total income of the household assuming the loan is at or
below 120 percent of the area median income, adjusted for household
size.
(6) The department determines that requiring immediate repayment
of the loan upon the borrower's death would be an economic hardship
for the person assuming the loan.
(7) The assumption is for a period of time necessary to permit the
person assuming the loan to repay the loan without economic
hardship.
(b) The department may not permit subordination of a loan made
pursuant to subdivision (b) of Section 50662.7 for owner-occupied
dwellings except under the following circumstances:
(1) The total household income of the borrower's household is at
or below 80 percent of the area median income, or, in the case of
extreme hardship, where borrowing becomes necessary to either protect
the health and safety of the occupants, or pay health care costs for
the borrower's immediate family.
(2) The total principal of the loans senior to the department's
loan is unchanged or decreased and the department's security interest
is not jeopardized, as determined by the department.
(c) With respect to any loans made pursuant to subdivision (b) of
Section 50662.7 for owner-occupied dwellings, the department shall do
all of the following:
(1) Annually mail, by the end of January, to any borrower who has
an outstanding balance a statement that provides all of the following
information:
(A) The principal loan balance.
(B) The interest accrued to the date of the statement.
(C) The interest percentage rate.
(D) Payment instructions with a disclaimer that a payment may not
be required until the outstanding loan balance is due and payable.
(E) Contact information, including a telephone number and mailing
address for borrower inquiries.
(2) By July 1, 2005, adopt a written application process and
evaluation guidelines to authorize the transfer of the borrower's
loan obligations described in subdivision (a) or the subordination of
the deed of trust. The department shall provide a summary of this
process and the guidelines with all statements mailed on or before
February 1, 2006.
(3) Mail to the party that applies to the department to
subordinate or assume the loan, the department's decision to approve
or deny the application within 60 days of receipt, along with a
statement of reasons for any denial.
(d) With respect to any loans made pursuant to subdivision (b) of
Section 50662.7 for owner-occupied dwellings, the department may
delay the foreclosure of the loan if the department determines that
its security interest is not jeopardized.
(e) The department may adopt guidelines for implementation of this
section. These guidelines shall not be considered to be regulations
as defined in Section 11342.600 of the Government Code and therefore
shall not be subject to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Division 3 of Title 2 of the
Government Code).

50663. The department may contract with a local public entity or
nonprofit corporation to provide any portion of uncommitted funds in
the Housing Rehabilitation Loan Fund for making deferred-payment
rehabilitation loans through such local public entity or nonprofit
corporation in aid of a (a) rehabilitation loan program conducted in
a concentrated rehabilitation area designated pursuant to Section
51302; (b) residential rehabilitation financing program conducted
pursuant to Part 13 (commencing with Section 37910) of Division 24;
(c) systematic enforcement program for which the California Housing
Finance Agency has allocated funds for mortgage loans pursuant to
Section 51311; (d) code enforcement agency repairing substandard
dwellings following the owner's failure to commence work following a
final notice or order from the enforcement agency; (e) program
conducted by the agency in a mortgage assistance area, provided such
area is located in a rural area; or (f) rehabilitation or code
enforcement program being undertaken by a local public entity or
nonprofit corporation in an area in which federal funds are being
used or will be used in conjunction with the program established
pursuant to this chapter. Eligibility for such loans shall be
governed by the provisions of Sections 50664, 50665, 50666, 50667,
50667.5, or 50668.

50664. Deferred-payment loans may be made to local agencies for
repair of substandard dwellings through a master agreement and fund
commitment. Such agreements shall limit the amount of
deferred-payment rehabilitation loans to actual rehabilitation costs
to the local agency, shall require that the full amount of
rehabilitation costs be made a special assessment against the
property involved, and shall require that the full amount collected,
including any interest attributable to delinquency, be promptly
repaid to the Housing Rehabilitation Loan Fund. However, loans made
pursuant to this section shall not otherwise bear any interest.

50665. In residential rehabilitation areas designated pursuant to
Section 37921, or in conjunction with financing of residential
rehabilitation outside such areas as provided in Section 37922.1 or
37924.5, a person or family of low or moderate income that is the
owner of an owner-occupied one-to-four dwelling unit property may
receive a deferred-payment rehabilitation loan for the excess of the
cost of meeting rehabilitation standards over the amount of financing
the local agency is able to provide without exceeding the owner's
ability to afford the monthly payments required. Owners of rental
residences may receive deferred-payment rehabilitation loans if they
have agreed to limit rent increases as provided in Section 37922.5,
and if such loans are necessary in addition to financing otherwise
provided in order to avoid increases in monthly debt service which
would result in rent increases causing permanent displacement of
persons of low income residing in the residence prior to
rehabilitation. Such owners may also receive deferred-payment
rehabilitation loans in the amount, if any, necessary to avoid such
increases in monthly debt service as would make it economically
infeasible to accept subsidies available to provide affordable rents
to persons of low income, if the owner agrees to accept such
subsidies.

50666. In concentrated rehabilitation areas designated pursuant to
Section 51302, a person or family of low or moderate income who is
the owner of an owner-occupied residential structure of one to four
units may receive a deferred-payment rehabilitation loan for the
excess of the cost of meeting rehabilitation standards over the
amount of the neighborhood improvement loan the administering agency,
local public entity, or qualified mortgage lender is able to provide
without exceeding the owner's ability to afford the monthly payments
required. Owners of rental housing may receive deferred-payment
rehabilitation loans if necessary to avoid increases in monthly debt
service which would result in rent increases causing permanent
displacement of persons of low income residing in the residential
structure prior to rehabilitation and if the owner contracts during
the term of the loan not to raise residential rentals except as
permitted by regulations of the agency pursuant to subdivision (g) of
Section 51307. Owners of rental housing may also receive
deferred-payment rehabilitation loans in the amount, if any,
necessary to avoid such increases in monthly debt service as would
make it economically infeasible to accept subsidies available to
provide affordable rents to persons of low income, if the owner
agrees to accept such subsidies.

50667. In those counties and cities in which the California Housing
Finance Agency has allocated funds for mortgage loans for
rehabilitation of housing developments pursuant to Section 51311, a
person or family of low or moderate income who is the owner of an
owner-occupied housing development may receive a deferred-payment
rehabilitation loan for the excess of the cost of meeting
rehabilitation standards over the amount of mortgage-loan financing
the agency is able to provide without exceeding the owner's ability
to afford the monthly payments required. Owners of rental housing
developments in such counties and cities may receive deferred payment
loans if necessary to avoid increases in monthly debt service which
would result in rent increases causing permanent displacement of
persons of low income residing in the housing development prior to
rehabilitation, and if the owner accepts a mortgage loan from the
agency with its limitation of rents and profits. Owners of rental
housing developments in such counties and cities may also receive
deferred-payment rehabilitation loans in the amount, if any,
necessary to avoid such increases in monthly debt service as would
make it economically infeasible to accept subsidies available to
provide affordable rents to persons of low income if the owner agrees
to accept such subsidies.

50667.5. In areas in which a local public entity or nonprofit
corporation is undertaking a rehabilitation or code enforcement
program for which federal funds are being used or will be used in
conjunction with the program established pursuant to this chapter, a
person or family of low income who is the owner of an owner-occupied
one-unit to four-unit dwelling may receive a deferred-payment
rehabilitation loan for the excess of the cost of meeting
rehabilitation standards over the amount of financing or assistance
the local public entity or nonprofit corporation is able to provide
without exceeding the owner's ability to afford the monthly payments
required. Owners of rental housing in such areas may receive
deferred-payment loans if necessary to avoid increases in monthly
debt service which would result in rent increases causing permanent
displacement of persons of low income residing in such housing and if
the owner enters into an agreement with the local public entity or
nonprofit corporation which provides for the regulation of rents,
consistent with a fair rate of return for the owner, if such owner is
not a nonprofit corporation, and consistent with the provision of
affordable rents, to assure that the purposes of this chapter are
carried out. Such agreement shall be binding on any successor in
interest of the sponsor. The department may adopt regulations which
govern the terms of such agreements. Owners of rental housing in such
areas may also receive deferred-payment rehabilitation loans in the
amount necessary to avoid such increases in monthly debt service as
would make it economically infeasible to accept subsidies available
to provide affordable rents to persons of low income if the owner
agrees to accept such subsidies.

50668. (a) Except as provided in subdivision (b) or in Section
50664, deferred-payment loans may be made only through agreements
between the local public entity which has received a fund commitment
and the owner of the dwelling unit or rental housing development or
through agreements approved by the local public entity between a
nonprofit corporation which has received a fund commitment and the
owner of the dwelling unit or rental housing development. The
agreements shall regulate contractor selection, work to be done, and
the schedule of contractor payments, and shall require that the loan
be secured by a deed of trust or other adequate security. Agreements
regarding housing other than owner-occupied one- to four-family
dwellings shall have the prior approval of the department.
(b) The department may provide deferred payment loans directly to
the owner-occupant of a dwelling unit or owner of a rental housing
development if it has been determined by the department that the
dwelling unit to be assisted is located in an eligible geographical
area pursuant to the provisions of this chapter and no eligible local
public entity exists in that area.
(c) All moneys received by the department in repayment of loans
made pursuant to this chapter, including interest and payments in
advance in lieu of future interest, shall be deposited in the Housing
Rehabilitation Loan Fund.

50668.5. For the purpose of providing financial assistance pursuant
to this chapter utilizing bond proceeds transferred to the Housing
Rehabilitation Loan Fund pursuant to paragraph (2) of subdivision (a)
of Section 53130, paragraph (2) of subdivision (b) of Section 53130,
and Sections 8878.20 and 8878.21 of the Government Code, deferred
payment loans made with these funds shall be subject to all of the
following special provisions, which shall prevail over conflicting
provisions of this chapter:
(a) (1) Applications for fund commitments shall be accepted by the
department at any time. Fund commitments shall be based on a ranking
of applications, which shall occur at least once every three months
until there are insufficient funds available to commit according to
this ranking. In making this ranking for rental housing developments,
priority shall be given to those projects which (A) serve the
greater number of eligible households as defined in Section 50105
with the lowest incomes, (B) provide the greater number of units with
three or more bedrooms, (C) are located in areas where the housing
need is great as determined by the department, taking into
consideration, among other factors, low vacancy rates, high market
rents, long waiting lists for subsidized housing, the stock of
substandard housing, and the potential loss of subsidized rental
housing to market-rate housing through demolition, foreclosure, or
subsidy termination, (D) complement the implementation of an existing
housing program, (E) maximize private, local, and other funding
sources, and (F) maximize long-term benefits for eligible households,
as defined in Sections 50079.5 and 50105. Subparagraph (B) above
shall not apply to applications for fund commitments submitted
pursuant to Section 50670 or to any application for residential
hotels and motels. In making this ranking for owner-occupied housing,
priority shall be given to those applications which (A) serve the
greater number of eligible households, as defined in Section 50105,
with the lowest income, (B) provide the greater number of units with
three or more bedrooms, (C) are located in areas where the need for
rehabilitation is great as determined by the department, taking into
consideration, among other factors, the amount of substandard
owner-occupied housing, low vacancy rates, and limited availability
of affordable housing, (D) complement the implementation of an
existing housing program, and (E) maximize available and appropriate
private, local, and other funding sources. The department shall also
evaluate the capability of the sponsor to rehabilitate, own, and
manage the rental housing development or the capability of the
applicant for funding for owner-occupied housing to implement the
proposed program.
(2) Loans for rental housing developments may be reviewed,
approved, and funded by the department directly to the sponsor. In
these cases, the department shall ensure that the sponsor notifies
the local legislative body of the sponsor's loan application prior to
a funding award. Loans to owner-occupants may be made by local
public entities or nonprofit corporations which have received fund
commitments from the department. The department shall ensure that the
local public entity or nonprofit corporation applying for fund
commitments for loans to owner-occupants notifies the local
legislative body of the application prior to a funding award. When
the department certifies a local public entity or nonprofit
corporation as being capable of making these loans, the department
shall delegate responsibility for reviewing and approving these loans
to the local public entity or nonprofit corporation. If it is
determined by the department that the local public entity or
nonprofit corporation is no longer capable of making or managing
these loans, the department may, at its sole discretion, revoke that
delegation of responsibility or cancel the funding commitment to the
local public entity or nonprofit corporation, or both. The department'
s regulations shall include procedures and standards for
certification and decertification.
(3) A sponsor may apply for loans for one or more rental housing
developments.
(b) (1) A housing development may utilize any combination of
federal, state, local, and private financial resources necessary to
make the development affordable, for the term of the state's
regulatory agreement, to the eligible households. Notwithstanding the
requirements of Section 50663, rental housing developments and
owner-occupied units assisted by the program may be located anywhere
in the state.
(2) In the case of loans for rental housing developments awarded
to nonprofit sponsors, the total secured debt in a superior position
to the department's loan, plus the department's loan, shall not
exceed 100 percent of the after rehabilitation value of the property,
as determined by an appraisal of the property conducted pursuant to
guidelines established in regulations of the department.
(3) The maximum loan amounts per unit established in regulations
pursuant to Section 50670 shall also apply to rental housing
developments rehabilitated or acquired and rehabilitated pursuant to
paragraph (1) of subdivision (a) of Section 50661, except that there
shall not be a maximum loan amount established per project. These
dollar limitations may be increased by the department, as necessary,
in high-cost areas of the state or where the correction of severe
health and safety defects or the provisions of handicapped
accessibility standards necessitate greater assistance. The
department, by regulation, may specify unit loan limits for loans
made for owner-occupied housing and the circumstances under which it
may grant exceptions to, or variances from, these limits.
(4) (A) Loans made to sponsors of rental housing developments for
acquisition and rehabilitation shall be for terms of not less than 30
years. Loans made to sponsors of rental housing developments for
rehabilitation only shall be for terms of not less than 20 years.
However, the term shall not exceed the useful life of the rental
housing development for which the loan is made. The sponsor may elect
to begin to repay the loan at any time in accordance with the
prepayment plan established in accordance with paragraph (6), if it
is determined by the department, that the sponsors can continue to
maintain the rents at levels affordable to eligible households.
(B) The term of the loan and the time for repayment may be
extended by the department for additional 10-year terms as long as
the rental housing development is operated in a manner consistent
with the regulatory agreement and the sponsor requires an extension
in order to continue to operate in a manner consistent with this
chapter.
(5) (A) In the case of loans made for rental housing developments,
eligible costs shall include those costs relating to (i) real
property acquisition, including refinancing of existing debt to the
extent necessary to reduce debt service to a level consistent with
the provision of affordable rents and the fiscal integrity of the
project; (ii) rehabilitation or reconstruction, including the
conversion of nonresidential structures to residential use; (iii)
general property improvements which are necessary to correct unsafe,
unhealthy, or unsanitary conditions, including renovations and
remodeling, including, but not limited to, remodeling of kitchens and
bathrooms, installation of new appliances, landscaping, and purchase
or installation of central air conditioning; (iv) necessary and
related onsite improvements; (v) reasonable administrative expenses
in connection with the planning and execution of the project, as
determined by the department; (vi) reasonable consulting costs; (vii)
rent-up costs; (viii) seismic rehabilitation improvements; and (ix)
any other costs of rehabilitation authorized by the department.
"Rent-up costs," as used in this section, means costs incurred while
a unit is on the housing market but not rented to its first tenant.
"Seismic rehabilitation improvements," as used in this section, means
improvements which are designed to increase seismic structural
safety in accordance with a plan developed by a civil engineer, a
structural engineer, or an architect for a particular building that
has been identified as hazardous by the city or county in which the
building is located in accordance with the criteria established by
the Seismic Safety Commission pursuant to Section 8875.1 of the
Government Code or in accordance with a previously adopted city or
county seismic safety ordinance adopted pursuant to Section 19163.
(B) In the case of loans made for owner-occupied housing, eligible
costs shall include those costs relating to (i) rehabilitation work
expenses; (ii) cost of room additions necessary to alleviate
overcrowding; (iii) costs of general property improvements including
renovations and remodeling, including, but not limited to, remodeling
of kitchens and bathrooms, installation of new appliances,
landscaping and purchase or installation of central air conditioning,
to the extent that they are necessary to correct unsafe, unhealthy,
or unsanitary conditions; (iv) costs related to necessary
architectural, engineering, and other technical consultants; (v)
costs of preliminary reports, title policies, credit reports,
appraisal reports, and fees for recording documents related to the
department's loans; (vi) costs of building permits and other
governmental fees; and (vii) if in conjunction with other
rehabilitation work, costs for improvements related to making the
housing accessible to the handicapped.
(C) Notwithstanding the provisions of Section 53130 which limit
the use of allocated proceeds with respect to project operating
costs, and Sections 53131 and 53133, the department may set aside or
use any amounts available in the fund to establish a rental housing
development default reserve for the purpose of curing or avoiding a
sponsor's defaults on the terms of any loan or other obligation which
jeopardizes the financial integrity of a rental housing development
or the department's security in the rental housing development. The
payment or advance of funds by the department pursuant to this
subparagraph shall be solely within the discretion of the department
and no sponsor shall be entitled to or have any right to payment of
these funds. Funds advanced pursuant to this subparagraph shall be
added to the loan amount secured by the deed of trust and shall be
payable to the department upon demand.
(D) Notwithstanding the provisions of Section 53130 which limit
the use of allocated proceeds with respect to project operating
costs, or Sections 53131 and 53133, the department may set aside or
use proceeds in the fund in an amount not to exceed 3 percent of the
amount of encumbrances for loans for owner-occupied housing to
establish an owner-occupied housing default reserve for the purpose
of curing or avoiding an owner's default on the terms of any loan or
other obligation which jeopardizes the department's security in the
owner-occupied housing. The payment or advance of funds by the
department pursuant to this subparagraph shall be solely within the
discretion of the department, and no homeowner shall be entitled to,
or have any right to payment of, these funds. Funds advanced pursuant
to this subparagraph shall be added to the loan amount secured by
the deed of trust and shall be payable to the department upon demand.
Interest payments from loans for owner-occupied housing shall be
allocated by the department into this reserve to replace the
allocated proceeds until the percent established by the department is
achieved solely with interest payments.
(6) Upon request of the sponsor, the department may permit
repayment of a sponsor's loan on the basis of net cash-flow. The
department shall develop a prepayment plan in conjunction with the
sponsor which will ensure the maintenance of affordable rents and the
fiscal integrity of the rental housing development. As an incentive
to encourage the prepayment of loans, the department may permit the
sponsor to retain one-half of the net cash-flow. The department shall
determine the method for calculating net cash-flow, which may
include a factor for excess debt service coverage or a return on cash
investment to the sponsor.
(7) If a loan is made pursuant to this chapter for both seismic
rehabilitation improvements and other eligible rehabilitation costs,
only those costs related to the seismic rehabilitation improvements
shall be counted and included for purposes of the fund reservation
made by Section 8878.20 of the Government Code.
(c) Principal and accumulated interest is due and payable upon
completion of the term of the loan. The loan shall bear interest at
the rate of 3 percent per annum on the unpaid principal balance.
However, the department shall reduce or eliminate interest payments
on a loan for any year or, alternatively, defer interest until the
deferred payment loan is repaid, if necessary to provide affordable
rents to households of very low and low income. The ability to pay
all or part of the 3 percent simple annual interest shall not be
considered in determining the fiscal integrity of the rental housing
development at the time of the rating and ranking of an application.
(1) "Maintain affordable rent levels," as used in this section,
means rents may be automatically increased by the sponsor on an
annual basis pursuant to an inflation index to be determined by the
department. The inflation index shall reflect anticipated annual
changes in rental housing development operating costs from a base
year when the rents are initially established. Any sponsor may appeal
to the department for a greater adjustment in rents necessary to
ensure the fiscal integrity of the rental housing development. If the
department does not respond within 60 days, the request shall be
deemed approved. A 30-day written notice shall be given to each
eligible household prior to an adjustment in the amount of rent.
(2) (A) Upon prior written approval by the department, a sponsor
may set income limits for incoming tenants at a level below the limit
specified in Section 50079.5. If a tenant's income exceeds this
income limit established by the sponsor, but does not exceed the
limit specified in Section 50079.5, that fact alone shall neither
constitute cause for the tenant's eviction, nor be a violation of the
sponsor's loan agreement. If a tenant's income exceeds the income
limit for a household specified in Section 50079.5, the tenant shall
be required to vacate the assisted unit within six months from the
date of income recertification or notice to the sponsor of an
increase in income over the permissible income level. That period may
be extended by the sponsor for an additional six-month period in
high cost rental areas with low vacancy rates, as determined by the
department. Any vacant units shall be rented to eligible households
until the required residency by eligible households is attained.
(B) In the case of limited equity housing cooperatives, the
provisions of this paragraph shall apply, except that tenants whose
incomes, upon recertification, exceed the limit specified in Section
50079.5 shall not be required to vacate their units. Instead, and
upon six months' notice, these tenants shall be required to pay rent
in an amount equal to the market rate rent for comparable units, as
determined by the department. When a tenant's income exceeds the
limit specified in Section 50079.5, the next available membership
share for occupancy in a comparable unit shall be sold to a household
with an income at or below this limit.
(3) When operating income as defined by the department is greater
than operating expenses, debt service, deposits required for reserve
accounts, payments pursuant to paragraph (6) of subdivision (b) if
elected by the sponsor, approved annual distributions, and any other
disbursements approved by the department, these excess funds shall be
paid into an account established in the fund. Funds in this account
shall be appropriated to the department for use to assist rental
housing developments funded pursuant to this section with proceeds of
bonds issued pursuant to Chapter 27 of the Statutes of 1988, Chapter
30 of the Statutes of 1988, or Chapter 48 of the Statutes of 1988,
subject to the following requirements:
(i) Excess funds in the account shall be allocated first into the
rental housing development default reserve established pursuant to
subparagraph (C) of paragraph (5) of subdivision (b). The balance of
this default reserve shall not exceed the maximum level of funding
established by regulations adopted by the department.
(ii) After the rental housing development default reserve is fully
funded with these excess funds, the department shall use all
additional excess funds in the account for payment of either
unforeseen capital improvements, the cost of which would jeopardize
the fiscal integrity and affordability of a rental housing
development, or to further reduce rents in a rental housing
development. The department may adopt regulations which specify the
procedures and standards for application for, and use of, these
funds. Those payments used for capital improvements shall be added to
the loan amount secured by the deed of trust and shall be payable to
the department upon demand.
(d) Prior to disbursement of any funds for loans to rental housing
developments made pursuant to this section, the department shall
enter into a regulatory agreement with the sponsor in accordance with
subdivision (d) of Section 50670, except that (1) the term of the
regulatory agreement shall be for the original term of the loan and
the agreement shall be binding upon the sponsor and successors in
interest upon sale or transfer of the rental housing development or
prepayment of the loan and (2) a nonprofit sponsor, other than a
governmental agency, may maintain a debt service coverage ratio of
115 percent and distribute earnings in an amount no greater than 8
percent of the nonprofit sponsor's actual investment. The regulatory
agreement also shall contain provisions requiring annual inspections
and review of year-end fiscal audits and related reports by the
department and provisions to maintain affordable rent levels to serve
eligible households.
(e) Where loans will be used in conjunction with federal or other
housing assistance or tax credits and a conflict exists between the
other state or federal program requirements and those of this chapter
with respect to the calculation of rents, the requirements of the
Deferred Payment Rehabilitation Loan Program and the Special User
Housing Rehabilitation Program may be waived only to the extent
necessary to permit federal or other state financial participation or
eligibility for tax credits.
(f) "Sponsor," for purposes of this section, has the same meaning
as defined in subdivision (c) of Section 50669.
(g) (1) The department shall adopt emergency regulations to
implement this chapter and to amend the maximum loan amounts per unit
established in regulations adopted pursuant to Section 50670, with
respect to loans made with funding subject to this section. The
regulations shall be conclusively presumed to be necessary for the
immediate preservation of the public peace, health, safety, or
general welfare within the meaning or purposes of Section 11346.1 of
the Government Code.
(2) Notwithstanding conflicting provisions of this chapter, the
department may elect to make the regulations referred to in paragraph
(1) additionally applicable until December 31, 1993, to all other
deferred payment loan programs authorized by this chapter, except the
programs specified in Sections 50662.5 and 50671, if the department
determines that the uniformity achieved thereby will avoid
significant additional administrative costs.
(h) For purposes of this section, "rental housing development"
means a single family house or a multifamily structure or structures
containing two or more dwelling units, including efficiency units.
One or more of the dwelling units in a rental housing development
shall be rented or leased or otherwise occupied as a primary
residence by a person or household who is not the owner of the
structure or structures. For the purposes of this section, motels
operated pursuant to subdivision (b) of Section 50669, residential
hotels, group or congregate homes, and limited equity housing
cooperatives are rental housing developments. Except for motels, the
limitations concerning types of residents and minimum number of units
set forth in subdivision (b) of Section 50669 shall not apply.
(i) "Affordable rent" for the purposes of this section shall be
established by the department in the regulations authorized by
subdivision (g). However, the initial rents shall be established by
the department based on a designated family size for each unit size,
and those initial rents shall not exceed 30 percent of 50 percent of
the area median income adjusted by that designated family size for
units restricted to occupancy by very low income households; or 30
percent of 60 percent of area median income adjusted by that
designated family size for units restricted to occupancy by
low-income households. In establishing affordable rent levels, the
department shall make provision in its regulations for projects
serving the physically and mentally handicapped persons.

50669. As used in Section 50670:
(a) "Deferred-payment loan" means a loan for acquisition and
rehabilitation of a rental housing development which (1) has a term
of not more than 30 years, but which shall not in any event exceed
the useful life of the rental housing development for which such loan
is made, as determined by the department, whichever is less, and (2)
is repaid in a single payment upon refinancing of such development
at the end of the term of the loan. Those loans shall bear interest
at the rate of 3 percent per annum on the unpaid principal balance,
provided, however, that the department shall reduce or eliminate
interest payments on a loan for any year or, alternatively, defer
interest payments until the deferred-payment loan is repaid, if
necessary to provide affordable rents to households of very low and
low income. The ability to pay all or part of the 3 percent simple
annual interest shall not be considered in determining the fiscal
integrity of the rental housing development at the time of the rating
and ranking of an application.
(b) "Rental housing development" means a residential structure or
structures containing five or more rental dwelling units for the
elderly or handicapped, provided that each unit is equipped with a
kitchen and bathroom, or a structure or structures intended for use
as a group home by five or more handicapped individuals or a
residential hotel for any low or very low income household.
"Residential hotel" shall have the same meaning as used in paragraph
(1) of subdivision (b) of Section 50519 but, for purposes of this
subdivision, there shall be an additional requirement that a majority
of the guestrooms in the hotel be residential hotel units. A
"residential hotel unit" means a room used or intended to be used as
a primary residential unit by a person or persons, which is subject
to Chapter 2 (commencing with Section 1940) of Title 5 of Part 4 of
Division 3 of the Civil Code, but which does not have either a
self-containing kitchen or bathroom, or both. A "residential hotel
unit" also includes an efficiency unit as defined in Section 17958.1.
"Rental housing development" also means a residential structure or
structures in operation or previously operated as a motel and subject
to subdivision (b) of Section 1940 of the Civil Code, which will
contain five or more dwelling units for any low or very low income
households. Eligible rehabilitation costs relative to motels may
include costs associated with adding self-containing kitchens and
bathrooms in each unit.
(c) "Sponsor" means any individual, joint venture, partnership,
limited partnership, trust, corporation, cooperative, local public
entity, duly constituted governing body of an Indian reservation or
rancheria, or other legal entity, or any combination thereof,
certified by the department as qualified to own, manage, and
rehabilitate a rental housing development. A sponsor may be organized
for profit or limited profit or be nonprofit.

50670. (a) The department shall establish a Special User Ho