Section 7735 - Underwriting and Construction Requirements(a) CalHome Recipients shall develop and employ Owner-Occupied Rehabilitation Program Guidelines submitted to and approved by the Department as addressing the following topics: (1) owner-occupied rehabilitation underwriting guidelines including borrower credit requirements; and(2) rehabilitation construction requirements.(b) Prior to commencement of rehabilitation work, an appraisal shall be obtained with the following requirements:(1) the appraisal may be prepared by Recipient's staff using the sales of comparable properties approach to determine value. If comparable sales are not available, the appraisal shall be prepared by a State-licensed, residential property appraiser;(2) the appraisal shall take into consideration the estimated value of the rehabilitation work to be completed on the property and shall include the pre-rehabilitated value and the after-rehabilitated value; and(3) An appraisal is not required in the case of rehabilitation work on a manufactured home not on a permanent foundation.(c) Any cash out of escrow to borrowers is prohibited.(d) Recipients must obtain title insurance in the amount of the Cal-Home Program loan at close of escrow.(e) Fire insurance (and Flood insurance where applicable) requirements are as follows: (1) Recipient must require borrowers to maintain insurance on the property in an amount at least equal to the replacement value of the improvements; and(2) Recipient must be named as additional loss payee on the policy.Cal. Code Regs. Tit. 25, § 7735
1. New section filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40). Note: Authority cited: Sections 50406(n) and 50650.2, Health and Safety Code. Reference: Sections 50650.3(b) and 50650.7, Health and Safety Code.
1. New section filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40).