Section 11104 - Terms and Conditions of Loans(a) Each construction and/or mortgage loan to a housing sponsor for a rental housing development shall be made on such terms and conditions as the agency shall determine are necessary or appropriate to provide sufficient security for obligations to and of the agency to ensure that the construction and mortgage loan programs of the agency are economically viable. Said terms and conditions shall include, but are not limited to, the following: (1) That the deed of trust securing said loan shall create a first, second or more junior lien on the housing development with respect to which said loan is made and shall be executed and recorded in accordance with existing applicable laws,(2) That the deed of trust shall provide, among other things, that the agency, upon default by the housing sponsor under the terms of the deed of trust and in the agency's discretion, either may declare all sums secured thereby immediately due and payable by executing and recording or causing to be executed and recorded a notice of default and election of sale or by commencing an appropriate foreclosure action. In addition, upon the occurrence of a default, the agency may, in person, by agent or by receiver appointed by a court enter upon and take possession of the housing development, collect all rents, and perform any acts necessary to maintain or operate it, all in such manner as to not cause the cessation of any federal subsidies.(3) That the amount of said loan shall be within all limitations prescribed by law,(4) That the scheduled loan repayments, including fees and charges together with interest accumulated on disbursal funds shall be estimated to be sufficient in amount and time to enable the agency to meet its administrative expenses and debt service on any notes or bonds issued or to be issued in connection with said loan,(5) That the housing sponsor shall have or acquire title to the site of the housing development free and clear of all liens or encumbrances which would materially affect the value of said site as a site for the housing development or a leasehold interest in the site of duration and terms found acceptable by the General Counsel,(6) That the housing development shall have been approved by the agency pursuant to Section 11102 of this article,(7) That any contract for the construction of the housing development shall be approved by the agency pursuant to Article 4 of this chapter, and(8) That disbursements of loan proceeds from the agency to the housing sponsor for progress payments for construction work shall be pursuant to procedures as provided in Section 11106.(b) The agency may make mortgage loans, for the purpose of creating or preserving rental housing developments in accordance with the Act. "Refinancing" as used herein shall mean providing new financing for a rental housing development for which the original construction was completed more than one (1) year prior thereto. "Completed" as used herein shall mean that certificates of occupancy shall have been issued for at least ninety percent (90%) of the units.(c) The development cost limitation of Section 50958 of the Code shall mean that the agency's mortgage loan amount, when combined with the amounts owed on any senior encumbrances, shall not exceed 95% (in the case of a housing sponsor other than a local public entity or nonprofit) or 100% (in the case of a local public entity or nonprofit), as applicable, of the development costs.(d) In the case of a refinancing mortgage loan, the term "development costs" as defined in Section 50065 of the Code shall mean the fair market value of the housing development as substantiated by an appraisal acceptable to the agency.(e) For the purposes of Section 51104(b) of the Code, "... guaranteed ... by an agency of the state ..." and, for the purposes of Section 51104(d) of the Code, "... guaranteed in whole or in part by an agency of the state, including the California Housing Finance Agency, a political subdivision of the state, ..." shall include but not be limited to arrangements whereby the agency secures the bonds by pledging its interests in mortgages pledged by the Federal National Mortgage Association upon conditions satisfactory to the agency.Cal. Code Regs. Tit. 25, § 11104
1. Redesignation of subsection (a), subsection renumbering, amendment of subsection (a)(1), and new subsections (b)-(e) and NOTE filed 3-9-95; operative 4-10-95 (Register 95, No. 10). Note: Authority cited: Section 51050(e), Health and Safety Code. Reference: Sections 50065, 50086, 50958, 51104(b) and (d), Health and Safety Code.
1. Redesignation of subsection (a), subsection renumbering, amendment of subsection (a)(1), and new subsections (b)-(e) and Note filed 3-9-95; operative 4-10-95 (Register 95, No. 10).