BILL NUMBER: AB 1797	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 22, 2012
	PASSED THE ASSEMBLY  AUGUST 27, 2012
	AMENDED IN SENATE  JUNE 26, 2012
	AMENDED IN ASSEMBLY  APRIL 19, 2012

INTRODUCED BY   Assembly Member Torres

                        FEBRUARY 21, 2012

   An act to amend Sections 50783, 50784, and 50786 of the Health and
Safety Code, relating to housing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1797, Torres. Mobilehome Park Purchase Fund.
   Existing law authorizes the Department of Housing and Community
Development to make loans from the Mobilehome Park Purchase Fund to
qualified mobilehome park residents, resident organizations, and
nonprofit housing sponsors or local public entities to finance
conversion of the parks to resident ownership and to make monthly
housing costs affordable. Existing law limits the interest rate on
loans to a rate of 3% per annum.
   This bill would authorize the department to lower that interest
rate if the department finds that it is necessary and will not
jeopardize the financial stability of the fund. This bill would
authorize the department to provide technical assistance to loan
applicants, or to contract with a qualified nonprofit entity to
provide that technical assistance, and to include the reasonable
costs of that technical assistance as a part of the loan principal.


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

  SECTION 1.  Section 50783 of the Health and Safety Code is amended
to read:
   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, unless the department finds that a lower interest
rate is necessary and will not jeopardize the financial stability of
the fund.
   (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 if 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.
  SEC. 2.  Section 50784 of the Health and Safety Code is amended to
read:
   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) If 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, unless the department finds that a lower interest rate is
necessary and will not jeopardize the financial stability of the
fund.
   (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 if 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 if 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.
  SEC. 3.  Section 50786 of the Health and Safety Code is amended to
read:
   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 that 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. If 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.
   (f) The department may provide technical assistance to loan
applicants, or may contract with a qualified nonprofit entity to
provide that technical assistance, and may include the reasonable
costs of the technical assistance as a part of the loan principal.