Cal. Code Regs. tit. 25 § 7674

Current through Register 2024 Notice Reg. No. 24, June 14, 2024

Section 7674 - Eligible Uses of Funds

(a) Funds may be used only for eligible costs that are incurred on the project as set forth in this section. In addition, the costs must be necessary and must be consistent with the lowest reasonable cost given consistent with the project's scope and area.

(b) Eligible categories of costs include the following:

(1) acquisition of project property, including existing improvements, and costs related to such acquisition;

(2) refinancing of that amount of debt existing at the time of application which is necessary to achieve rents for low- and very-low income tenants in accordance with program requirements and costs related thereto;

(3) reconstruction, when the estimated cost including demolition, construction and related activities is less than the estimated cost of rehabilitation of the rental housing development;

(4) conversion when the resulting units are of modest design and with modest amenities and when the estimated total rehabilitation cost is less than the new construction cost of comparable units in the area;

(5) costs of rehabilitation necessary to correct code violations and those costs directly related to the correction of code violations;

(6) general costs required to correct unsafe, unhealthy and unsanitary conditions, and which are directly related to the project, including the following:

(A) general property improvements when the sponsor can demonstrate that such improvements are integral to the project;

(B) work related to protecting the physical security;

(C) work related to reducing long-term maintenance costs;

(D) other on-site and off-site improvements.

(7) seismic rehabilitation improvements, and work directly related thereto pursuant to section 7675;

(8) architectural, appraisal, engineering, legal and other consulting costs and fees, which are directly related to the planning and execution of the project and which are incurred through third-party contracts;

(9) administrative expenses pursuant to section 7680;

(10) rent-up costs;

(11) carrying costs during construction, including insurance, financing, and taxes;

(12) building permits and state and local fees;

(13) work lawfully required by a governmental entity which is reasonably required as a condition of project approval to correct unsafe, unhealthy or unsanitary conditions;

(14) relocation benefits and assistance to lower income residential tenants displaced as a result of acquisition and/or rehabilitation. All other temporary and permanent relocation benefits specified in section 7685 are not eligible uses of program funds;

(15) escrow, title insurance, recording and other related costs.

(c) If only a portion of the rental housing development consists of assisted units, funds from the fund may be used for the costs of all items specified in subdivision (b) associated exclusively with the assisted units. They may also be used for a share of the cost of such items that cannot specifically be allocated to either assisted units or non-assisted units or nonresidential space. This share shall not exceed an amount in direct proportion to the ratio between the gross floor area of the assisted units and the total gross floor area of the structure. No program funds may be used for costs associated exclusively with non-assisted units or nonresidential space except pursuant to section 7675.

Cal. Code Regs. Tit. 25, § 7674

1. New section filed 6-12-89 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 6-12-89 (Register 89, No. 24). A Certificate of Compliance must be transmitted to OAL within 120 days or the regulation will be repealed on 10-10-89. For history of former subchapter 8 (sections 7700-7714.5, not consecutive), see Register 85, No. 33.
2. New section refiled 10-6-89 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 10-10-89 (Register 89, No. 42). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 2-7-90.
3. New section refiled 2-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g) and Government Code section 11346.1(h); operative 2-7-90 (Register 90, No. 6). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 6-7-90.
4. Amendment of subsections (a), (b)(2) and (c) filed 3-5-90 as an emergency pursuant to Health and Safety Code section 50668.5(g); operative 3-5-90 (Register 90, No. 12). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 7-3-90.
5. Certificate of Compliance as to 2-5-90 and 3-5-90 orders including amendment transmitted to OAL 5-22-90 and filed 5-29-90 (Register 90, No. 29).

Note: Authority cited: Section 50668.5, Health and Safety Code. Reference: Section 50668.5, Health and Safety Code.