Section 1481.1 - Affordable Price Sales: Use Restrictions(a)Restrictions. As a condition for sale at an Affordable Price, the purchasing Occupant shall agree to Use and Resale Restrictions, which shall be recorded as an encumbrance and lien against the property the buyer purchases, containing the terms, conditions, and restrictions imposed by the Department to ensure the property remains available to Persons and Families of Low or Moderate Income or Above-Moderate Income Households. Such restrictions include, but are not limited to:(1) restricting the use of the property; and(2) restricting rental of the property; and(3) restricting transfers of the property; and(4) restricting refinancing of the property; and(5) specifying distribution of proceeds from any subsequent sale; and(6) monitoring and enforcement provisions.(b)Renting.(1) A property sold at an Affordable Price shall be used only as owner-occupied housing. No portion of a property may be offered for rent, except with prior written permission from the Department. The Department may provide written permission to rent only if the Affordable Price buyer demonstrates a hardship beyond the control of the buyer that has forced a temporary relocation. Hardship may be supported by: (A) loss of work or reassignment to a new location; or(B) personal health problems of the Affordable Price buyer or that of their immediate family member; or(2) An Affordable Price buyer shall not, under any circumstances, allow rental of a property purchased at an Affordable Price to exceed a total of 12 months in any 60 month-period(3) An Affordable Price buyer, if permitted to rent by the Department, may only rent to Persons and Families of Low or Moderate Income at an Affordable Rent. The monthly rent income shall not exceed the Affordable Housing Cost used to calculate the Affordable Price.(c)Resale. A property sold at an Affordable Price shall not be resold for five years from the date of close of escrow, except as specified in (1).(1) The Department may permit property to be resold within five years from the date of close of escrow if the Affordable Price buyer demonstrates they have been forced to relocate permanently because of a hardship beyond their control. If the Department permits resale, then the Affordable Price buyer shall comply with requirements specified in (2)(A) through (D) below.(2) A property sold at an Affordable Price may be resold after five years from the date of close of escrow by the Affordable Price buyer subject to all the following: (A) The property shall be sold for Fair Market Value. A property shall not be resold unless the Department has provided written approval of the subsequent Fair Market Value sales price.(B) The Affordable Price buyer shall pay CalHFA the difference between the Fair Market Value at Time of Purchase and the Affordable Price paid for the property.(C) The Affordable Price buyer shall also pay to the Department all rent that was owed to the Department at the time the sales contract from the Department was executed.(D) The Affordable Price buyer shall also pay CalHFA the difference between the subsequent Fair Market Value sales price and the Fair Market Value at Time of Purchase, minus: (1) actual closing costs paid by the Affordable Price buyer for the subsequent sale; and(2) 20% of the difference described in (D) for each full calendar year the Affordable Price buyer has owned the property, so that nothing is owed pursuant to (D) after five years of ownership.(E) If the subsequent Fair Market Value sales price is less than the Fair Market Value at Time of Purchase, then (B) and (D) do not apply and the Affordable Price buyer shall instead pay CalHFA the difference between the subsequent Fair Market Value sales price and the Affordable Price in addition to the amounts owed to the Department in (C).(F) All payments required pursuant to (B), (C) and (D) shall be made contemporaneous to the close of escrow and shall be paid directly from escrow.(d)Failure to Agree to Restrictions. The Department will provide the applicable Use and Resale Restrictions with the sales contract for any property sold at an Affordable Price. The Department will also provide Historical Covenants, as described in § 1475(f), if required, with the sales contract. If an Occupant fails to sign and return the Use and Resale Restrictions or any applicable Historical Covenants to the Department within the time period described in § 1481(j), then the sales contract is void.(e)Removing Restrictions. The Use and Resale Restrictions described in this section will cease encumbering a property sold at an Affordable Price only when: (1) The property is resold at Fair Market Value in compliance with (c); and(2) All amounts due to CalHFA as described in (c) are paid in full.Cal. Code Regs. Tit. 21, § 1481.1
1. New section filed 12-13-2021 as an emergency; operative 12-13-2021 (Register 2021, No. 51). Pursuant to Government Code Section 54237.10, this is a statutorily deemed emergency and the emergency language remains in effect until 12-14-2023. A Certificate of Compliance must be transmitted to OAL by 12-13-2023 or emergency language will be repealed by operation of law on the following day.
2. Pursuant to Government Code section 54239.5(e)(3), as added by Senate Bill 959 (Stats. 2022, Ch. 668), a Certificate of Compliance must be transmitted to OAL by 9-30-2024 or language of the emergency order of 12-13-2021 (Register 2021, No. 51) will be repealed by operation of law on the following day (Register 2023, No. 27). Note: Authority cited: Section 54237, Government Code. Reference: Sections 54236, 54237 and 54238, Government Code.
1. New section filed 12-13-2021 as an emergency; operative 12/13/2021 (Register 2021, No. 51). Pursuant to Government Code Section 54237.10, this is a statutorily deemed emergency and the emergency language remains in effect until 12-14-2023. A Certificate of Compliance must be transmitted to OAL by 12-13-2023 or emergency language will be repealed by operation of law on the following day.