2005 California Health and Safety Code Sections 50650-50650.7 CHAPTER 6. CALHOME PROGRAM

50650.  The Legislature finds and declares as follows:
   (a) An adequate supply of safe and affordable housing is the
foundation for strong and sustainable communities.  Owner occupied
housing is a key housing resource, contributing to neighborhood
stability as well as economic vitality.
   (b) In California, homeownership is beyond the reach of a large
segment of the population.  There are also many homeowners who lack
the resources to make necessary repairs to their homes, or who would
welcome the opportunity to share them with suitable tenants.
   (c) Reflecting California's diversity, there is a variety of
proven approaches to the promotion of homeownership within the state.
  The purpose of the CalHome Program established by this chapter is
to support existing homeownership programs aimed at lower and very
low income households and operated by private nonprofit and local
government agencies, and thereby to increase homeownership, encourage
neighborhood revitalization and sustainable development, and
maximize use of existing homes.
   (d) The CalHome Program is intended to take the place of the
Senior Citizens' Shared Housing Program established by Chapter 3.6
(commencing with Section 50533), which is repealed by the act
enacting this chapter.
50650.1.  This chapter shall be known and may be cited as the
CalHome Program.
50650.2.  The department shall administer this chapter.
50650.3.  (a) Funds appropriated for purposes of this chapter shall
be used to enable low- and very low income households to become or
remain homeowners.  Funds shall be provided by the department to
local public agencies or nonprofit corporations as either of the
following:
   (1) Grants for programs that assist individual households.
   (2) Loans that assist development projects involving multiple
homeownership units, including single-family subdivisions.
   (b) Grant funds may be used for first-time homebuyer downpayment
assistance, home rehabilitation, homebuyer counseling, home
acquisition and rehabilitation, or self-help mortgage assistance
programs, or for technical assistance for self-help and shared
housing homeownership.  Loan funds may be used for purchase of real
property, site development, predevelopment, and construction period
expenses incurred on homeownership development projects, and
permanent financing for mutual housing or cooperative developments.
Upon completion of construction, the department may convert project
loans into grants for programs of assistance to individual
homeowners.  Financial assistance provided to individual households
shall be in the form of deferred payment loans, repayable upon sale
or transfer of the homes, when they cease to be owner-occupied, or
upon the loan maturity date.  Financial assistance may be provided in
the form of a secured forgivable loan to an individual household to
rehabilitate, repair, or replace manufactured housing located in a
mobilehome park and not permanently affixed to a foundation.  The
loan shall be due and payable in 20 years, with 10 percent of the
original principle to be forgiven annually for each additional year
beyond the 10th year that the home is owned and continuously occupied
by the borrower.  Not more than 10 percent of the funds available
for the purposes of this chapter in a fiscal year shall be used for
financial assistance in the form of secured forgivable loans.
   (c) All loan repayments shall be used for activities allowed under
this section, and shall be governed by a reuse plan approved by the
department.  Those reuse plans may provide for loan servicing by the
grant recipient or a third-party local government agency or nonprofit
corporation.
50650.4.  To be eligible to receive a grant or loan, local public
agencies or nonprofit corporations shall demonstrate sufficient
organizational stability and capacity to carry out the activity for
which they are requesting funds, including, where applicable, the
capacity to manage a portfolio of individual loans over an extended
time period.  Capacity may be demonstrated by substantial successful
experience performing similar activities, or through other means
acceptable to the department.  In administering the CalHome program,
the department may permit local agencies and nonprofit corporations
to apply their own underwriting guidelines when evaluating CalHome
rehabilitation loan applications, following prior review and approval
of those guidelines by the department.  The local agency or
nonprofit corporation may not subsequently alter its underwriting
guidelines with respect to the use of CalHome funds without review
and approval by the department.  In allocating funds, the department
shall utilize a competitive application process, using weighted
evaluation criteria, including, but not limited to, the extent that
the program or project utilizes volunteer or self-help labor, trains
youth and young adults in construction skills, creates balanced
communities, involves community participation, or whether the program
or project contributes toward community revitalization.  To the
extent feasible, the application process shall ensure a reasonable
geographic distribution of funds.
50650.5.  For the purposes of this chapter:
   (a) Mutual housing and limited equity cooperative housing shall be
deemed to be forms of homeownership and developments of those types
of housing, as defined in subdivision (b), shall be eligible to
receive assistance under the CalHome program.  The department may
require that mutual housing or limited equity cooperative applicants
not simultaneously apply for and receive funding through the
department's rental housing programs for the same projects for which
CalHome assistance is sought.  For mutual housing and limited equity
cooperative projects, all of the following shall apply:
   (1) Program funds shall be used for permanent financing only.
   (2) The department shall enter into a regulatory agreement
limiting occupant incomes, occupancy charges, and share purchase
terms for 55 years.
   (3) Notwithstanding Section 50650.3, program assistance shall be
provided in the form of a deferred payment loan.
   (b) As used in this section, "mutual housing development" means a
housing development owned and sponsored by a nonprofit corporation or
a limited partnership in which the nonprofit corporation is the sole
general partner, and all of the following requirements are met:
   (1) The nonprofit corporation is exempt from taxes under Section
501(c)(3) of the Internal Revenue Code or subdivision (d) of Section
23701 of the Revenue and Taxation Code.
   (2) The nonprofit corporation has as one of its principal purposes
the advancement of mutual housing.
   (3) A majority of the board of directors of the nonprofit
corporation sponsor are residents or former residents of developments
sponsored by the nonprofit corporation.
   (4) The nonprofit corporation agrees to assist the residents of
the development in setting up a resident council, and the operating
budget for the development provides for ongoing financial support to
allow the resident council to carry out its activities.
   (c) Lower income participants in a qualified mutual housing
development that is assisted pursuant to this chapter shall not be
required to have a vested ownership interest in the property.
50650.6.  The department may use up to 5 percent of the funds
appropriated for the purposes of this chapter for its costs in
administering the program.
50650.7.  For appropriations of fifteen million dollars
($15,000,000) or less, the department may administer the funds using
guidelines that shall not be subject to the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Title 2
of the Government Code).  If an appropriation exceeds that amount,
the department may administer the funds using guidelines for 24
months, during which time those guidelines shall not be subject to
the Administrative Procedure Act.  The guidelines and any regulations
governing the CalHome Program shall include, among other things,
loan terms and limits, underwriting standards, home price limits,
application procedures and selection criteria, loan and grant
documentation requirements, and monitoring requirements.