BILL NUMBER: AB 1699	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 29, 2012
	PASSED THE ASSEMBLY  AUGUST 30, 2012
	AMENDED IN SENATE  AUGUST 24, 2012
	AMENDED IN SENATE  AUGUST 14, 2012
	AMENDED IN SENATE  AUGUST 6, 2012
	AMENDED IN SENATE  JUNE 26, 2012
	AMENDED IN ASSEMBLY  APRIL 17, 2012

INTRODUCED BY   Assembly Member Torres

                        FEBRUARY 15, 2012

   An act to amend Section 50515.2 of, and to add Chapter 3.9
(commencing with Section 50560) to Part 2 of Division 31 of, the
Health and Safety Code, relating to affordable housing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1699, Torres. Affordable housing.
    Existing law authorizes the Department of Housing and Community
Development to provide technical assistance to groups and persons
with various housing needs and to administer various housing loan
programs. Existing law authorizes the department to extend the term
of existing multifamily housing loans made under specified programs
upon the request of any borrower, subject to certain conditions, as
provided.
   This bill would authorize the department to extend the term of an
existing department loan, subordinate a department loan to new debt,
and authorize an investment of tax credit equity under certain rental
housing finance programs, subject to specified conditions. The bill
would authorize the department to charge a fee to cover its costs
related to extending the term of a loan or for processing the
restructuring of a loan. The bill would make changes with regard to
existing rent subsidies and rents under existing department housing
programs, as specified. The bill would require the department, within
available resources, to post on its Internet Web site information
regarding household incomes and rents for developments approved for
restructuring, as specified. The bill would authorize the department
to adopt guidelines that are not subject to the Administrative
Procedures Act, as specified.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Over the past 30 years, the Legislature has authorized and
funded a variety of affordable rental housing development finance
programs administered by the Department of Housing and Community
Development, each with its own unique requirements for ongoing
operation.
   (b) The vast majority of developments funded under these programs
have operated successfully, and remain an important source of
high-quality, highly affordable units for extremely low income and
very low income households. However, even well-managed developments
will often need significant renovation, beyond that which can be
covered by existing project reserves, and some will run at a deficit
that is not sustainable on a long-term basis. As developments age,
more and more are likely to fall into this category.
   (c) There are decreasing sources of public funding available to
cover needed renovations, and to eliminate operating deficits. For at
least the next few years, private debt and equity generated through
the sale of low-income housing tax credits will likely be the main
source of capital for this purpose.
   (d) Accessing private debt and tax credit equity sometimes
requires restructuring the regulatory restrictions applicable to a
development, including increasing rents. Recognizing this, the
Legislature previously enacted legislation, Senate Bill 707 in 2007,
authorizing the restructuring of regulatory restrictions for some of
the oldest developments. This legislation applied only to selected
department programs that were active in the 1980s.
   (e) Renovation needs have come to light in a number of projects
financed under another set of department programs, dating from the
early to mid-1990s. To address these needs, authority is needed for a
similar restructuring of regulatory restrictions for these projects.

   (f) It is the intent of the Legislature that the regulatory
restructurings needed to encourage and facilitate renovations and
eliminate operating deficits minimize the impact on existing tenants,
particularly those with the lowest incomes, and preserve as much
affordability as possible.
   (g) Rather than have multiple different restructuring programs, it
is more efficient to have one program, applicable to all of the
department's older programs, with variations only where essential to
address unique situations associated with the existing historical
programs.
  SEC. 2.  Section 50515.2 of the Health and Safety Code is amended
to read:
   50515.2.  (a) Notwithstanding any other law, the department may
extend the term of an existing multifamily housing loan made by the
department under the original Rental Housing Construction Program
established by Chapter 9 (commencing with Section 50735), the Special
User Housing Rehabilitation Program established by Section 50670, or
the Deferred Payment Rehabilitation Loan Program established by
Chapter 6.5 (commencing with Section 50660) upon the request of any
borrower subject to the following conditions:
   (1) The borrower shall provide to the department a complete report
showing all existing tenants, their incomes, as reported in the most
recent annual income certification, and the rents currently charged
to each tenant.
   (2) The borrower shall agree to an extension of the term of the
loan by an additional 55 years from the date of departmental
approval. If the department determines that the remaining useful life
of a project is less than 55 years, the loan may be extended for the
remaining useful life of the project, but not less than 30 years.
The department may convert the existing outstanding principal and any
accrued interest into the new loan amount. The interest rate on the
extended term shall be 3 percent simple interest. All future payments
of principal and interest may be deferred except for a percentage of
interest equal to the percentage charged in the Multifamily Housing
Program (Chapter 6.7 (commencing with Section 50675)) for the
department's ongoing monitoring and management responsibilities.
   (3) The borrower shall agree to amend or replace the existing
regulatory agreement to include terms generally equivalent to those
used in the Multifamily Housing Program. In addition, the borrower
shall agree to replace, amend, or revise any other loan document as
necessary to accomplish the purposes of this section.
   (4) (A) The borrower shall agree to a rent schedule that ensures
that all assisted units are affordable to households earning no more
than 60 percent of the area median income and that at least 35
percent of all assisted units shall be reserved for, affordable to,
and occupied by, households earning less than or equal to the
midlevel target used by the Multifamily Housing Program, unless the
department finds both of the following:
   (i) That the project income is insufficient to maintain fiscal
integrity, as that term is used in the Multifamily Housing Program,
and is insufficient to maintain the rents required under this
subparagraph pursuant to the terms of the Uniform Multifamily
Regulations, or any successor regulations, except that commercial
vacancy loss shall be projected based on the operating history of the
project, commercial vacancy rates in the neighborhood, and similar
factors typically used by commercial lenders.
   (ii) That the borrower has exhausted all available potential
sources of rental subsidies, including, but not limited to, federal,
state, and local funds.
   (B) If the department finds that a reduction in the percentage of
assisted units to less than 35 percent of assisted units is
justified, it shall ensure that the largest possible percentage is
reserved for the targeted households.
   (C) For the purposes of this paragraph, "midlevel target used by
the Multifamily Housing Program" shall mean the following:
   (i) For counties with an area median income of 110 percent or less
of the state median income, it shall mean households earning 30
percent of state median income, expressed as a percentage of area
median income.
   (ii) For counties with an area median income that exceeds 110
percent of the state median income, it shall mean households earning
less than 35 percent of state median income, expressed as a
percentage of area median income.
   (5) No tenant residing in a project at the time of an extension
authorized by this section may be displaced as a result of the
regulatory revisions authorized by this section, and, for the initial
operating year after approval of the extension, that tenant may not
have his or her rent increased above the amounts specified in his or
her preexisting regulatory agreements, except that no tenant may pay
less than 30 percent of his or her income, calculated pursuant to the
Multifamily Housing Program criteria. If a rent increase authorized
under this section would exceed a 10 percent increase in payment for
a lower income tenant, the project owner shall phase in the increase
so that it does not exceed 10 percent per year. After the initial
operating year after the extension authorized under this section, the
rents for all regulated units that are subject to the new agreement
may be adjusted in the percentage calculated pursuant to the
Multifamily Housing Program criteria, plus the amount necessary to
bring an individual tenant up to the 30-percent-of-income standard,
provided that the total annual increase does not exceed 10 percent.
Rent adjustments for all tenants occupying assisted units at the time
of the extension shall be based on the tenant's initial rent
established under this paragraph. Upon vacancy of an assisted unit
occupied at the time of the extension, the new base rent for that
unit shall be established consistent with the standards used in the
Multifamily Housing Program for the regulated income band, subject to
the reservation of units required under paragraph (4).
   (b) The department may approve an extension of a loan made by the
department if it determines that the project has, or will have after
rehabilitation or repairs, a potential remaining useful life of at
least 30 years and that the project is deemed financially feasible
pursuant to the terms of its Uniform Multifamily Regulations or
successor regulations.
   (c) The department may subordinate its loan or loans to refinance
existing senior debt and to additional permanent financing if that
additional senior debt is used only for rehabilitation, repairs, or
improvements, or both, including related soft costs, that are modest
in size, scope, and cost, as determined by the department and
necessary to maintain and extend the useful life of the project.
   (d) (1) For the purposes of this subdivision, the "agency projects"
are the 26 projects assisted through the original Rental Housing
Construction Program with funds administered by the California
Housing Finance Agency.
   (2) Upon the request of a borrower the agency may extend the term
of an existing loan for an agency project by a period that is equal
to the remaining useful life of the project, as determined by the
agency, but not more than 55 years and not less than 30 years from
the date of agency approval, under terms that are substantially
consistent with the purposes of this section, if all of the following
conditions are met:
   (A) The borrower shall provide to the agency the report described
in paragraph (1) of subdivision (a).
   (B) The extension shall be subject to the conditions set forth in
paragraph (2) of subdivision (a).
   (C) The rent levels and tenant protections described in paragraphs
(4) and (5) of subdivision (a) shall be satisfied, except that the
agency, not the department, shall make the determination required
under clause (i) of subparagraph (A) of paragraph (4) of subdivision
(a) that the project income is insufficient to meet the agency's
affordable multifamily lending program requirements.
   (3) Any determination or approval under this section regarding the
agency projects shall be by the agency rather than the department.
   (4) The borrower and the agency shall amend, replace, or revise
any other loan documents or agreements governing the loans for the
agency projects as necessary to accomplish the purposes of this
section.
   (5) All funds received by the agency for the agency projects,
whether by loan repayment, foreclosure, accrued interest, or
otherwise, shall be used to provide assistance to existing or future
projects financed by or through the agency pursuant to terms
consistent with the agency's affordable multifamily lending programs.

   (e) It is the intent of the Legislature in enacting this section
that the department should manage its reserves for the original
Rental Housing Construction Program in a manner that will allow for
the continuation of current benefits to current low-income tenants
for the longest period of time possible. Accordingly, rent subsidies
shall be continued only for units occupied by lower income tenants
who were in residence at the time of the extension authorized under
this section.
   (f) It is the intent of the Legislature in enacting this section
to provide to the department the flexibility necessary to preserve
the affordable rental units for which the state has already made a
significant public investment. Accordingly, the department may
implement this section through guidelines that shall not be subject
to Chapter 2.5 (commencing with Section 11340) of Part 1 of Title 2
of the Government Code.
   (g) This section shall become operative on July 1, 2008.
   (h) This section shall not apply to loan extensions and senior
debt subordinations executed by the department and recorded after the
effective date of the guidelines adopted by the department pursuant
to subdivision (h) of Section 50560.
  SEC. 3.  Chapter 3.9 (commencing with Section 50560) is added to
Part 2 of Division 31 of the Health and Safety Code, to read:
      CHAPTER 3.9.  PORTFOLIO RESTRUCTURING


   50560.  (a) Subject to the requirements of this chapter, the
department may approve an extension of a department loan, the
subordination of a department loan to new debt, or an investment of
tax credit equity under one or more of the following rental housing
finance programs: the original Rental Housing Construction Program
established by Chapter 9 (commencing with Section 50735), the Special
User Housing Rehabilitation Program established by Section 50670,
the Deferred Payment Rehabilitation Loan Program established by
Chapter 6.5 (commencing with Section 50660), the rental component of
the California Natural Disaster Assistance Program established by
Chapter 6.5 (commencing with Section 50671), the State Earthquake
Rehabilitation Assistance Program established by Chapter 6.5
(commencing with Section 50671), the rental component of the
California Housing Rehabilitation Program established by Section
50668.5, the component of the Rental Housing Construction Program
funded with bond proceeds governed by Section 50771.1, the Family
Housing Demonstration Program established by Chapter 15 (commencing
with Section 50880), and the Families Moving to Work Program
established by Chapter 15 (commencing with Section 50880).
   (b) Once the department has approved a loan extension,
subordination, or tax credit investment pursuant to this chapter, the
statutes enumerated in subdivision (a), and the regulations
promulgated pursuant to these statutes, shall no longer apply to
developments restructured pursuant to this chapter. These
developments shall instead be governed by this chapter and guidelines
adopted pursuant to subdivision (h).
   (c) All projects restructured pursuant to this chapter shall
comply with the affirmative marketing and language accessibility
requirements set forth in Section 50736 of this code and Section
65863 of the Government Code.
   (d) The department may approve an extension of a loan, the
subordination of a department loan to new debt, or an investment of
tax credit equity if it determines that the project has, or will have
after rehabilitation or repairs, a potential remaining useful life
equal to or greater than the term of the restructured loan.
   (e) The department may subordinate its loan to refinance existing
senior debt only as necessary for project feasibility and to
reimburse borrower advances for predevelopment costs, recent capital
improvements, and recent operating deficits.
   (f) If the extension of a department loan, the subordination of a
department loan to new debt, or an investment of tax credit equity
will result in a rent increase for tenants of a development, the
department may only subordinate a loan to senior debt if necessary to
increase the feasibility of a project and to fund reasonable
rehabilitation or improvements including soft costs. The application
to refinance shall include a third-party analysis that supports the
need for refinancing.
   (g) The department may approve additional senior debt only as
necessary to finance rehabilitation or repairs, including soft costs,
that are modest in size, scope, and cost, as determined by the
department.
   (h) It is the intent of the Legislature in enacting this chapter
to provide to the department the flexibility necessary to maintain
the quality of the affordable rental housing units for which the
state has already made a significant public investment. The
department may implement this chapter through guidelines that shall
not be subject to Chapter 2.5 (commencing with Section 11340) of Part
1 of Title 2 of the Government Code. These guidelines shall be
developed through the following process:
   (1) The department shall provide a notice of proposed action as
described in Section 11346.5 of the Government Code to the public at
least 21 days before the close of the public comment period.
   (2) The department shall schedule at least one public hearing as
described in Section 11346.8 of the Government Code before the close
of the public comment period.
   (3) The department shall maintain a rulemaking file as described
in Section 11347.3 of the Government Code.
   (4) The final version of the guidelines shall be accompanied by a
final statement of reason as described in subdivision (a) of Section
11346.9 of the Government Code.
   (5) The rules and guidelines shall be effective immediately upon
adoption by the department.
   50561.  (a) The department may approve an extension of an existing
rental housing development loan, the subordination of a department
loan to new debt, or an investment of tax credit equity as long as
the rental housing development is being operated in a manner
consistent with the regulatory agreement and the development requires
an extension in order to continue to operate in a manner consistent
with this chapter. Each extension shall be for a period of not less
than 10 years and each extension shall not exceed 55 years, or 58
years if needed to match the term of tax credit restrictions. The
interest rate shall be 3 percent simple interest. All loan payments
shall be deferred for the full term of the loan, except for residual
receipts payments. These residual receipts payments shall be
structured to avoid reducing the amount of payments on local public
agency loans resulting solely from changes in the payment terms on
the department's loan, and not resulting from fees or other payments
to the borrower, and shall otherwise be consistent with the
provisions of the department's Uniform Multifamily Regulations or
successor regulations. The department may charge a monitoring fee to
cover the aggregate monitoring costs it incurs in years that the loan
is extended and charge a transaction fee to cover its costs for
processing restructuring transactions. The department may waive or
defer some or all fees, if it determines that a particular
development or class of developments does not have the ability to
make these payments. In determining the fees and payments to be
charged, the department shall seek to share monitoring activities
with other regulatory agencies and to minimize the impact on tenants
with the lowest incomes and on the capacity of the developments to
support private debt or secure tax credit investments.
   (b) To the minimum extent necessary to support new debt to pay for
rehabilitation, rents for assisted units in these developments may
be adjusted. This rehabilitation shall be determined by the
department to be demonstrably necessary, based on third-party
assessment and on the department's own inspection. Assisted units in
developments with a specific, department-approved plan to undertake
the necessary rehabilitation, at a level that equals or exceeds the
minimum per-unit rehabilitation cost standards under the low-income
housing tax credit program, may be adjusted as follows:
   (1) For developments originally financed under the bond-funded
component of the Rental Housing Construction Program pursuant to
Section 50771.1, and the Family Housing Demonstration Program, rents
may be increased up to a maximum of 30 percent of 60 percent of area
median income, for units designated in the development's original
regulatory agreement as lower income units, and up to a maximum of 30
percent of 35 percent of area median income, for units designated in
the development's original regulatory agreement as very low income
units.
   (2) For developments originally financed under other programs,
rents for at least 35 percent of the assisted units, or as specified
in the original regulatory agreement governing the development,
whichever is greater, shall be restricted to the midlevel target used
by the Multifamily Housing Program. Rents for the balance of the
assisted units may be increased up to a maximum of 30 percent of 60
percent of area median income. For purposes of this paragraph,
"midlevel target used by the Multifamily Housing Program" shall mean
either of the following:
   (A) For counties with an area median income of 110 percent or less
of state median income, it shall mean 30 percent of 30 percent of
state median income, expressed as a percentage of area median income.

   (B) For counties with an area median income that exceeds 110
percent of the state median income, it shall mean, 30 percent of 35
percent of state median income, expressed as a percentage of area
median income.
   (c) Rent increases for tenants living in assisted units at the
time of restructuring pursuant to this chapter shall be limited as
follows:
   (1) For existing tenants with incomes not exceeding 35 percent of
area median income, increases shall be limited to 5 percent per year,
until the rents reach the levels set under subdivision (b).
   (2) For existing tenants with incomes exceeding 35 percent of area
median income, increases shall be limited to 10 percent per year,
until they reach the levels specified in paragraphs (1) and (2) of
subdivision (b) of Section 50561.
   (3) It is the intent of the Legislature that rent increases for
existing tenants authorized by this subdivision shall not be greater
than necessary to ensure the financial feasibility of the project.
The projected maximum rent for tenants in assisted units, as
determined by subdivision (b), shall not exceed 50 percent of the
household's actual income. This requirement shall be applied using
maximum rent levels and household incomes determined at the time of
restructuring or at the time of the department's approval of the
restructuring.
   (4) If the refinance of a loan results in a rent increase, the
project sponsor shall provide tenants with the following
notifications:
   (A) Notice six months prior to the scheduled rent increase with an
estimate of the amount of the increase.
   (B) Notice 90 days prior to the actual increase with the exact
amount of the new rent.
   (d) If existing tenants move, the rent for these units may be
increased immediately up to the level specified in paragraphs (1) and
(2) of subdivision (b). The income limit for new tenants shall
correspond with the rent limit set pursuant to paragraphs (1) and (2)
of subdivision (b).
   (e) Once rents achieve the levels set forth in paragraphs (1) and
(2) of subdivision (b), income levels and rent limits shall be
calculated consistent with the calculation methodology used under the
Low Income Housing Tax Credit program and the Multifamily Housing
Program, and rent increases shall be based on increases in the area
median income.
   (f) Eligible households displaced as a result of rehabilitation
pursuant to this section shall be accorded first priority in
occupying comparable units in the development from which they were
displaced, subsequent to rehabilitation. Tenants of rental housing
developments repaired with assistance provided under this chapter who
are temporarily or permanently displaced as a result of
rehabilitation or other repair work, shall be entitled to relocation
benefits pursuant to, and subject to, the requirements of Section
7260 of the Government Code. Sponsors of assisted rental housing
developments shall be responsible for providing the benefits and
assistance. The costs of the benefits and the assistance provided to
tenants shall be eligible for funding by a loan provided pursuant to
this section.
   (g) The guidelines adopted by the department pursuant to
subdivision (h) of Section 50560 shall be patterned after the
regulations governing the Multifamily Housing Program, including the
Uniform Multifamily Regulations, except that the department may adopt
different standards for the following factors:
   (1) Commercial vacancy loss assumptions must reflect project
operating history.
   (2) Debt service coverage ratios.
   (3) Payment terms and principal amount of senior debt, considering
financial market conditions, including costs and department risk, as
determined by the department.
   (4) Developer fee limitations shall be consistent with California
Tax Credit Allocation Committee regulations for inclusion in the
basis for projects receiving 9 percent tax credits, for projects
receiving the special rent increases contemplated by this chapter,
and, consistent with the requirements of other funding sources, for
projects not receiving special rent increases.
   (5) Replacement reserve deposit amounts must be based on projected
costs over 20 years, adjusted for inflation, and as shown in an
independent replacement reserve analysis.
   (h) It is the intent of the Legislature in enacting this section
that the department shall manage its reserves for the original Rental
Housing Construction Program in a manner that will allow for the
continuation of benefits to current low-income tenants for the
longest period of time possible up to the term of the original
regulatory agreement or the depletion of the annuity funds, whichever
occurs first. Accordingly, rents for those households in units
subsidized by the annuity fund established pursuant to Section 50748
may be increased to 30 percent of household income. Any household
affected by the rent increase permitted by this subdivision shall be
given at least 90 days advanced notice of the increase.
   (i) (1) The department shall, within available resources, post on
its Internet Web site information regarding household incomes and
rents for developments approved for restructuring.
   (2) The information shall be provided within six months of a
restructuring and, thereafter, no less than every three years.
   (3) The information shall include the following or similar
information:
   (A) The monthly rent of each household at the time of
restructuring.
   (B) The current monthly rent of each household.
   (C) The annual income of each household as a percentage of area
median income at the time of restructuring.
   (D) The current income of each household as a percentage of area
median income.
   50562.  (a) If a department loan is extended or subordinated, or
if a new tax credit investment occurs, the department shall enter
into a new regulatory agreement with the development's owner, or
amend the existing agreement. The agreement shall be binding upon the
development's owner and successors in interest upon sale or transfer
of the development property, regardless of any prepayment of the
loan. The agreement shall be recorded in the office of the county
recorder in the county in which the development is located. The new
or amended regulatory agreement shall:
   (1) Set standards for tenant selection to ensure occupancy by the
eligible households.
   (2) Govern the terms of occupancy agreements.
   (3) Restrict rents for assisted units, consistent with this
chapter.
   (4) Provide for periodic inspections by the department.
   (5) Require occupancy and financial reports, and financial audits
for the development.
   (6) Govern the use of operating income for the development.
                                                    (7) Govern the
use of reserves for the development.
   (8) Have a term for not less than the term of the loan, including
any extension.
   (9) Include other provisions necessary to carry out the purposes
of this chapter.
   (b) The development's owner shall agree to replace or amend any
other loan document to accomplish the purposes of this chapter.
   50563.  (a) Sections 50560 and 50562 shall apply to the
restructuring of loans for group homes, except as modified in this
section.
   (b) The department may approve an extension of a department loan
at the end of the current loan term to an existing owner of a group
home, as long as the group home is being operated in a manner
consistent with the regulatory agreement and the group home requires
an extension in order to operate in a manner consistent with this
chapter. The extension may be for a period of no less than 10 years
and up to 30 years.
   (c) The guidelines adopted by the department pursuant to
subdivision (h) of Section 50560 may simplify requirements as
appropriate to group homes and may include a limitation on occupancy
of vacant units or rooms to extremely low-income households, rent
limitations appropriate to required income levels, requirements that
property be maintained, financial reporting, and other provisions as
determined necessary by the department.
   (d) Loan terms contained in the existing promissory note shall
apply during the period of the loan extension. All unpaid principal
and interest shall be due at the end of the extension. However, the
department may require periodic payments of principal or interest, or
both, during the extension period. If the borrower repays the loan
prior to the end of the extension, regulatory requirements shall be
removed. As necessary to generate sufficient revenue to cover the
cost of processing loan transactions and long-term monitoring of
program requirements, the department may also assess loan processing
and monitoring fees. This subdivision shall not authorize a rent
increase that exceeds 30 percent of the household's actual income,
based upon the most recent income certification.
   (e) Rent increases for tenants living in assisted units at the
time of restructuring pursuant to this chapter shall be limited as
follows:
   (1) For existing tenants with incomes not exceeding 30 percent of
area median income, rent increases shall be limited to 5 percent per
year until rents reach the levels for targeted income levels
specified in the regulatory agreement.
   (2) For existing tenants with incomes exceeding 30 percent of area
median income, rent increases shall be limited to 10 percent per
year until rents reach the levels for targeted income levels
specified in the regulatory agreement.
   (f) It is the intent of the Legislature in enacting this chapter
that the department shall manage its reserves for the original Rental
Housing Construction Program in a manner that will allow for the
continuation of benefits to current low-income tenants for the
longest period of time possible up to the term of the original
regulatory agreement or the depletion of the annuity funds.
Accordingly, rent subsidies shall be continued only for units
occupied by lower income tenants who were in residence at the time of
the extension authorized under this section and rents for those
households shall be increased to 30 percent of household income.
   50564.  (a) Notwithstanding any other law, the department may
approve the extension of a loan to an owner who occupies his or her
housing unit funded by the department under any of the following loan
programs: the owner component of the California Natural Disaster
Assistance Act Program established by Chapter 6.5 (commencing with
Section 50660), the California Homeownership Assistance Program
established by Chapter 10 (commencing with Section 50775), the owner
component of the California Housing Rehabilitation Program
established by Chapter 6.5 (commencing with 50668), the owner
component of the Deferred Payment Rehabilitation Loan Program
established by Chapter 6.5 (commencing with Section 50660), the owner
component of the State Earthquake Rehabilitation Assistance Program
established by Chapter 6.5 (commencing with Section 50671), and the
owner component of the Mobilehome Park Resident Ownership Program
established by Chapter 11 (commencing with Section 50780).
   (b) A loan extension for a period of 10 years may be granted when
the loan is due if the owner demonstrates that his or her household
income is no more 50 percent of area median income, adjusted for
family size, or if the department determines that it is not in the
department's interest to call the loan due.
   (c) Loan terms contained in the existing promissory note shall
apply during the period of the loan extension. All unpaid principal
and interest shall be due at the end of the extension. However, the
department may require periodic payments of principal or interest, or
both, during the extension period. If the borrower repays the loan
prior to the end of the extension, program restrictions shall be
removed. As necessary to generate sufficient revenue to cover the
cost of processing loan transactions and long-term monitoring of
program requirements, the department may also assess loan processing
and monitoring fees.
   (d) The department may implement this section through guidelines
that shall not be subject to Chapter 2.5 (commencing with Section
11340) of Part 1 of Title 2 of the Government Code.