2009 California Health and Safety Code - Section 51670-51671 :: Chapter 5. Bond Insurance

51670.  (a) The agency may insure bonds issued by state or local
agencies, or other types of issuers approved by the board of
directors of the agency, to finance or refinance the construction,
rehabilitation, acquisition, or preservation of single-family and
multifamily residential housing for persons and families of low and
moderate income. The agency may charge and collect insurance premiums
for the insurance and fees for services performed in conjunction
with the processing and approval of insurance applications as
determined by the agency. The agency shall take all reasonable steps
to ensure that bonds insured pursuant to this chapter are in a form
satisfactory to the agency and contain provisions relating to the
underlying security for the bonds as may be required by the agency.
   (b) The agency shall take reasonable steps to ensure that both of
the following occur:
   (1) The bonds contain, or are subject to, terms respecting
repayment, dates of maturity, and other provisions satisfactory to
the agency.
   (2) The bonds contain, or are subject to, provisions that the
agency deems necessary with respect to security interests of the
agency, including provisions relating to subrogation, liens and
releases of liens, payment of taxes, escrow or trusteeship
requirements, or other matters.

51671.  The agency may insure bonds pursuant to this chapter only if
it determines that the proceeds of the bonds will be utilized, to
the maximum extent feasible, for one of the following purposes:
   (a) Construction or rehabilitation of multifamily rental housing
for persons and families of low or moderate income.
   (b) Construction or rehabilitation of housing that utilizes
federal rental or other subsidies.
   (c) Construction or rehabilitation of other dwelling units for
persons and families of low or moderate income.