(a) The department may deposit an amount not to exceed 10 percent of the moneys appropriated to the account in a feasibility subaccount in the account. The moneys in that account may be utilized to provide funds, as determined necessary by the department, to ensure the economic feasibility of, and to enable the development of, community housing developments or congregate housing developments assisted under this chapter.
(b) The department may deposit an amount not to exceed 3 percent of the funds appropriated to the account in an emergency reserve subaccount established in the account. The department may expend moneys in this account to defray unanticipated cost increases or revenue shortfalls, as determined by the department, to the extent necessary to maintain the fiscal integrity of the development and maintain affordable rents for eligible households. Notwithstanding the provisions of Section 53130 which limit the use of allocated bond proceeds for project operating costs, and notwithstanding the provisions of Section 53133, the department may use any amounts available in the account for the purpose of curing or avoiding a sponsor’s default on the terms of any loan or other obligation which will jeopardize the financial integrity of a housing development or the department’s security in the housing development. The payment or advance of any funds by the department pursuant to this subdivision shall be solely within the discretion of the department, and no sponsor shall be entitled to, or have any right to, payment of these funds. Funds advanced pursuant to this subdivision shall be added to the loan amount secured by the deed of trust and shall be payable to the department upon demand.
(c) The subaccounts established by this section shall be governed by, and be subject to, all of the provisions governing the account.
(Amended by Stats. 1990, Ch. 1311, Sec. 6. Effective September 25, 1990.)
Last modified: October 25, 2018