2005 California Health and Safety Code Sections 50780-50786.5 CHAPTER 11. MOBILEHOME PARK PURCHASE FUND

50780.  (a) The Legislature finds and declares as follows:
   (1) That manufactured housing and mobilehome parks provide a
significant source of homeownership for California residents, but
increasing costs of mobilehome park development and construction,
combined with the costs of manufactured housing, the costs of
financing and operating these parks, the low vacancy rates, and the
pressures to convert mobilehome parks to other uses increasingly
render mobilehome park living unaffordable, particularly to those
residents most in need of affordable housing.
   (2) That state government can play an important role in addressing
the problems confronted by mobilehome park residents by providing
supplemental financing that makes it possible for mobilehome park
residents to acquire the mobilehome parks in which they reside and
convert them to resident ownership.
   (3) That a significant number of older mobilehome parks exist in
California, the residents of which may collectively lack the
experience or other qualifications necessary to successfully own and
operate their parks; that these parks provide low-cost housing for
their residents that would be difficult to replace if the parks were
converted to other uses; that these parks are more likely than other
parks to be threatened by physical deterioration or conversion to
other uses; and that it is, therefore, appropriate to use the
resources of the fund pursuant to this chapter to transfer these
parks to ownership by qualified nonprofit housing sponsors or by
local public entities for the purpose of preserving them as
affordable housing.
   (b) Therefore, it is the intent of the Legislature, in enacting
this chapter, to encourage and facilitate the conversion of
mobilehome parks to resident ownership or ownership by qualified
nonprofit housing sponsors or by local public entities, to protect
low-income mobilehome park residents from both physical and economic
displacement, to obtain a high level of private and other public
financing for mobilehome park conversions, and to help establish
acceptance for resident-owned, nonprofit-owned, and government-owned
mobilehome parks in the private market.
50781.  Unless the context otherwise requires, the following
definitions given in this section shall control construction of this
chapter:
   (a) "Affordable" means that, where feasible, low-income residents
should not pay more than 30 percent of their monthly income for
housing costs.
   (b) "Conversion costs" includes the cost of acquiring the
mobilehome park, the costs of planning and processing the conversion,
the costs of any needed repairs or rehabilitation, and any
expenditures required by a governmental agency or lender for the
project.
   (c) "Department" means the Department of Housing and Community
Development.
   (d) "Fund" means the Mobilehome Park Purchase Fund created
pursuant to Section 50782.
   (e) "Housing costs" means the total cost of owning, occupying, and
maintaining a mobilehome and a lot or space in a mobilehome park.
The department's regulations shall specify the factors included in
these costs and may, for the purposes of calculating affordability,
establish reasonable allowances.
   (f) "Individual interest in a mobilehome park" means any interest
that is fee ownership or a lesser interest that entitles the holder
to occupy a lot or space in a mobilehome park for a period of not
less than either 15 years or the life of the holder.  Individual
interests in a mobilehome park include, but are not limited to, the
following:
   (1) Ownership of a lot or space in a mobilehome park or
subdivision.
   (2) A membership or shares in a stock cooperative, as defined in
Section 11003.2 of the Business and Professions Code, or a limited
equity housing cooperative, as defined in Section 33007.5 of this
code.
   (3) Membership in a nonprofit mutual benefit corporation that
owns, operates, or owns and operates the mobilehome park.
   (g) "Low-income resident" means an individual or household that is
a lower income household, as defined in Section 50079.5.  However,
personal assets shall not be considered in the calculation of income,
except to the extent that they actually generate income.
   (h) "Low-income spaces" means those spaces in a mobilehome park
operated by a resident organization, a qualified nonprofit housing
sponsor, or a local public entity that are occupied by low-income
residents.
   (i) "Mobilehome park" means a mobilehome park, as defined in
Section 18214, or a manufactured home subdivision created by the
conversion of a mobilehome park, as defined in Section 18214,
including a senior park, to resident ownership or ownership by a
qualified nonprofit housing sponsor or local public entity.
   (j) "Program" means the Mobilehome Park Resident Ownership
Program.
   (k) "Qualified nonprofit housing sponsor" means a nonprofit public
benefit corporation, as defined in Part 2 (commencing with Section
5110) of Division 2 of the Corporations Code, that (1) has received
its tax-exempt status under Section 501(c)(3) of the Internal Revenue
Code, (2) is not affiliated with or controlled by a for-profit
organization or individual, (3) has extensive experience with the
development and operation of publicly subsidized affordable housing,
(4) the department determines is qualified by experience and
capability to own and operate a mobilehome park that provides housing
affordable to low-income households, and (5) has formal arrangements
for ensuring resident participation or input in the management of
the park that may include, but not be limited to, membership on the
board of directors. "Qualified nonprofit housing sponsor" also means
a limited partnership where all of the general partners are nonprofit
mutual or public benefit corporations that meet the requirements of
paragraphs (1) to (5), inclusive.
   (l) "Resident organization" means a group of mobilehome park
residents who have formed a nonprofit corporation, cooperative
corporation, or other entity or organization for the purpose of
acquiring the mobilehome park in which they reside and converting the
mobilehome park to resident ownership. The membership of a resident
organization shall include at least two-thirds of the households
residing in the mobilehome park, or in each park of a combination of
parks where the residents of two or more parks combine to form a
single resident organization.  The two-thirds of households in the
resident organization at the time of funding the park need not be the
same households that were residing in the park when the application
for assistance was submitted to the department.  A household's
membership in the resident organization when the application was
submitted to the department shall not be a requirement for that
household to receive a loan or assistance under this chapter.
   (m) "Resident ownership" means, depending on the context, either
the ownership by a resident organization of an interest in a
mobilehome park that entitles the resident organization to control
the operations of the mobilehome park for a term of no less than 15
years, or the ownership of individual interests in a mobilehome park,
or both.
50782.  The Mobilehome Park Purchase Fund is hereby created in the
State Treasury and, notwithstanding Section 13340 of the Government
Code or any other provisions of law, is continuously appropriated to
the department for the purpose of providing loans pursuant to this
chapter and for related administrative costs of the department.
Notwithstanding Section 16305.7 of the Government Code, any moneys
received by the department pursuant to this chapter, any other
sources, repayments, interest, or new appropriations shall be
deposited in the fund.  Money in the fund shall not be subject to
transfer to any other fund pursuant to any provision of Part 2
(commencing with Section 16300) of Division 4 of Title 2 of the
Government Code, except the Surplus Money Investment Fund.  The
department may 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.  Notwithstanding Section 16305.7
of the Government Code, all interest, dividends, and pecuniary gains
from the investments shall accrue to the fund.
50783.  (a) The department may make loans from the fund to resident
organizations for the purpose of financing mobilehome park conversion
costs.
   (b) Loans provided pursuant to this section shall be for a term of
no more than three years and shall bear interest at a rate of 3
percent per annum.
   (c) Loans provided pursuant to this section shall be for the
minimum amount necessary to enable a resident organization to acquire
and convert the mobilehome park.  To the extent possible, the loan
amount shall not exceed 50 percent of the approved conversion costs.
However, the loan amount may be for up to 95 percent of the approved
conversion costs attributable to the low-income households in the
park when approved by the department.
   (d) The department may grant approval to exceed 50 percent of the
approved conversion costs only where both of the following are
demonstrated:
   (1) That the applicant has made an effort to secure additional
funds from other sources and these funds are not available.
   (2) That the project would not be feasible, as determined by the
department, without a waiver of the 50 percent financing limitation.
   (e) The total secured debt in a superior position to the
department's loan plus the department's loan shall not exceed the
value of the collateral securing the loan.
50784.  (a) The department may make loans from the fund to (1)
individual low-income residents of mobilehome parks that have
converted to resident ownership, (2) resident organizations that have
converted or plan to convert a mobilehome park to resident
ownership, or (3) qualified nonprofit housing sponsors or local
public entities that plan to acquire a mobilehome park, provided that
no less than 30 percent of the spaces in the park are for occupancy
by manufactured homes owned by low-income residents.  The purpose of
providing loans pursuant to this section is to reduce the monthly
housing costs for low-income residents to an affordable level.
   (b) (1) Any mobilehome park purchased by a local public entity
with a loan pursuant to this section shall be transferred to a
nonprofit housing sponsor or resident organization that has
converted, or plans to convert, the park to resident ownership no
later than three years from the date of loan closing, with all
obligations under the loan assumed by the nonprofit organization or
resident organization.
   (2) If a local public entity has made a good faith effort, but has
not been able, to transfer the park by the end of the three-year
period, the entity may apply to the department for an additional
three-year extension. Upon a determination by the department that the
local public entity has made a good faith effort to transfer the
park in accordance with paragraph (1), it shall have an additional
three years from the expiration date of the first three-year period
to consummate the transfer.  The three-year extension shall only be
granted once by the department for each loan to a local public
entity.
   (3) Where a local public entity fails to make a good faith effort
to transfer the park within the first three-year period, as
determined by the department, or fails to transfer the park by the
expiration date of the extended three-year period, it shall repay the
loan in full to the department.
   (c) Loans provided pursuant to this section shall be for a term of
no more than 30 years and shall bear interest at a rate of 3 percent
per annum.
   (d) The department may establish flexible repayment terms for
loans provided pursuant to this section if the terms are necessary to
reduce the monthly housing costs for low-income residents to an
affordable level, and do not represent an unacceptable risk to the
security of the fund.  Flexible repayment terms may include, but are
not limited to, graduated payment schedules with negative
amortization.
   (e) Loans provided to low-income residents pursuant to this
section shall be for the minimum amount necessary to reduce the
borrower's monthly housing costs to an affordable level.  All of the
following shall apply to loans to finance individual interests
pursuant to this section:
   (1) To the extent possible, loan amounts shall not exceed 50
percent of the acquisition costs of the individual interests in the
mobilehome parks. However, the loan amounts may be for up to 100
percent of the acquisition costs of the individual interests in the
mobilehome parks when approved by the department.
   (2) The department may grant approval to exceed 50 percent of the
acquisition costs of the individual interests only where both of the
following are demonstrated:
   (A) That the low-income resident has made an effort to secure
additional funding from other sources and these funds are not
available.
   (B) That the low-income resident would be unable to purchase an
individual interest without a waiver of the 50 percent financing
limitation.
   (3) The total indebtedness of the loan provided pursuant to this
section plus any senior debt upon individual interests may not exceed
100 percent of the value of the collateral securing the loan, plus
the amount of costs incidentally, but directly, related to the
acquisition.
   (f) Loans provided to resident organizations, qualified nonprofit
housing sponsors, or local public entities pursuant to this section
shall be for the minimum amount necessary to reduce the monthly
housing costs of low-income residents to an affordable level.  All of
the following shall apply to loans made to resident organizations,
qualified nonprofit housing sponsors, or local public entities
pursuant to this section:
   (1) To the extent possible, loan amounts shall not exceed 50
percent of the conversion costs attributable to the low-income
spaces.  However, the loan amounts may be for up to 95 percent of the
conversion costs attributable to the low-income spaces when approved
by the department.
   (2) The department may grant approval to exceed 50 percent of the
conversion costs attributable to low-income spaces only where both of
the following are demonstrated:
   (A) That the applicant has made an effort to secure additional
funds from other sources and these funds are not available.
   (B) That the project would not be feasible as determined by the
department without a waiver of the 50 percent financing limitation.
   (3) The total secured debt in a superior position to the
department's loan plus the department's loan shall not exceed the
value of the collateral securing the loan plus the amount of costs
incidentally, but directly, related to the acquisition and, if
applicable, rehabilitation of the park.
   (g) Funds provided pursuant to this section shall not be used to
(1) assist residents who are not of low income, (2) reduce monthly
housing costs for low-income residents to less than 30 percent of
their monthly income, or (3) facilitate the purchase of a park by a
qualified nonprofit corporation or local public entity from a public
entity that had acquired the park prior to the commitment of the loan
from the program.
   (h) Subject to the restrictions of this subdivision, funds
provided pursuant to this section may be used to finance the costs of
relocating a mobilehome park to a more suitable site within the same
jurisdiction if the department determines that the cost of the
relocation, including any and all relocation costs to the affected
households, is a more prudent expenditure of funds than the costs of
needed or repetitive repairs to the existing park. Funds provided
pursuant to this section shall not be used to relieve a park owner of
any responsibility for covering the costs of mitigating the impacts
of a park closure as may be provided for by local ordinance or
pursuant to Section 65863.7 or 66427.4 of the Government Code.
50785.  (a) In determining the eligibility for and amount of loans
pursuant to Sections 50783 and 50784, the department shall take into
consideration, among other factors, all of the following:
   (1) The reasonableness of the conversion costs relating to
repairs, rehabilitation, construction, or other costs.
   (2) Any administrative and security factors affecting the
department's program operation and administration.
   (3) Whether or not the projects complement the implementation of a
local housing program to preserve or increase the supply of housing
for persons and families of low or moderate income.
   (4) Whether or not state funds are utilized in the most efficient
and effective manner.
   (5) In the case of a loan to a qualified nonprofit housing sponsor
or to a local public entity, evidence of resident participation in
the conversion and management of the park, in the form of either
resident participation on the board of directors of the entity that
acquires ownership of the park, or the establishment of, and
consultation with, a permanent resident advisory board.
   (b) To the extent consistent with requests for assistance, the
department shall allocate funds available for the purposes of this
chapter throughout the state in accordance with identified housing
needs, including seeking to allocate not less than 20 percent to
rural areas.
50786.  (a) The department shall adopt regulations for the
administration and implementation of this chapter.
   (b) The department shall obtain the best available security for
loans made pursuant to this chapter.  The security may include a
note, deed of trust, assignment of lease, or other form of security
on real or personal property which the department determines is
adequate to protect the interests of the state.  To the extent
applicable, these documents and any regulatory provisions shall be
recorded or referenced in a recorded document in the office of the
county recorder of the county in which the mobilehome park is
located.
   (c) The degree of continuing regulatory control with respect to
park operations and resident loans exercised by the department in
making loans pursuant to this chapter shall be commensurate with the
level of financial assistance provided and in all cases shall be
adequate to protect the state's security interest and ensure the
accomplishment of the purposes of the program authorized by this
chapter.  The regulatory requirements shall be set forth in a
regulatory agreement, deed of trust, or other lien, and any violation
of these requirements shall be considered a violation of a security
document.  Where loans are made to a qualifying nonprofit housing
sponsor or local public entity, a regulatory agreement shall be
recorded against the mobilehome park.  This regulatory agreement
shall contain provisions limiting occupancy, rents, and park
operation for the original loan term.  The department may release
individual spaces from the regulatory agreement only if they are
purchased by residents who occupy them.
   (d) Before providing financing pursuant to this chapter, the
department shall require provision of, and approve, at least all of
the following:
   (1) Verification at the time of application and prior to funding
that at least two-thirds of the households residing in the mobilehome
park support the plans for acquisition and conversion of the park.
   (2) Verification that either no park residents shall be
involuntarily displaced as a result of the park conversion or the
impacts of the displacement shall be mitigated as required under
state and local law.  For purposes of this requirement, compliance
with Section 66427.5 of the Government Code shall be conclusively
presumed to have mitigated economic displacement.
   (3) Verification that the conversion is consistent with local
zoning and land use requirements, other applicable state and local
laws, and regulations and ordinances.
   (4) Projected costs and sources of funds for all conversion
activities.
   (5) Projected operating budget for the park during and after the
conversion.
   (6) A management plan for the conversion and operation of the
park.
   (7) If necessary, a relocation plan for residents not
participating that is in compliance with Chapter 16 (commencing with
Section 7260) of Division 7 of Title 1 of the Government Code.
   (e) The department shall, to the greatest extent feasible, do all
of the following:
   (1) Require participation by cities and counties in loan
applications submitted pursuant to this chapter.
   (2) Contract with private lenders or local public entities to
provide program administration and to service loans made pursuant to
this chapter.
   (3) Give priority to applications for resident-owned parks.
50786.5.  Notwithstanding any other provision of this chapter, where
a city, county, or other local governmental entity has acquired a
mobilehome park for the purpose of converting the park to resident
ownership, and the department has entered into a binding agreement
for the commitment of funds to the project, the department shall not
require that more than a simple majority of households residing in
the park actually purchase, or have opened escrow to purchase,
interests or spaces in the park as a condition of disbursement of
funds for loans made pursuant to Section 50784 to qualified
individual households.