SEC. 66.10. LOAN COMMITTEE DECISIONS.

The Director shall publish from time to time Program Regulations for the Program that are necessary and appropriate to effectively and efficiently implement the Program, as authorized by the Act and in accordance with this Chapter 66. The Director shall publish such Program Regulations on the website of MOHCD and in such other public places as the Director shall deem appropriate, and provide the Program Regulations to persons requesting a written copy thereof. The Program Regulations shall address matters including, but not limited to, Program and Fund administration, underwriting criteria, loan processing and documentation, and loan enforcement. The Program Regulations shall also cover the use of Loan proceeds for the costs of the acquisition, improvement, and/or rehabilitation of “at risk” multi-unit residential buildings, as further provided herein. Such Program Regulations and any material amendments thereto shall be subject to review and approval by the Loan Committee, and shall be reported to the General Obligation Bond Oversight Committee at the first meeting of that committee following the effective date of such Program Regulations or amendments.

(Added as Sec. 66.2 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

(Former Sec. 66.3 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.4 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

SEC. 66.4. AMOUNT AND USE OF PROGRAM FUNDS.

(a) The Program and the issuance of general obligation bonds by the City to fund such Program in accordance with the Act are hereby authorized. A maximum of $350,000,000 will be raised for the Program through the issuance and sale of general obligation bonds of the City for deposit into the Fund for use in the Program and for payment of certain bond issuance costs, and such general obligation bonds shall be allocated as provided below. Loans made under the Program for multi-unit properties may be used for costs associated with:

(1) the acquisition, improvement, and/or rehabilitation of “at-risk” multi-unit residential buildings;

(2) the conversion of such buildings to permanent affordable housing; and

(3) financing the cost of needed seismic, fire, health and safety upgrades, or other major rehabilitation for habitability of such structures. Notwithstanding the foregoing, proceeds of the Program shall not be used to finance new construction of permanent affordable housing units, or the acquisition of multi-unit residential buildings without improvement and/or rehabilitation of such buildings.

(b) A maximum of $150,000,000 of general obligation bonds shall be issued for the purpose of originating Below Market Rate Loans under the Program in accordance with Program Regulations.

(c) Of the $150,000,000 available for Below Market Rate Loans, a maximum of $60,000,000 of such amount shall be made available for for1 Deferred Loans under the Program..1

(d) A maximum of $200,000,000 of general obligation bonds shall be made available to originate Market Rate Loans.

(e) Fees for Services, Indemnification. To the extent permitted by law, MOHCD may charge reasonable fees, including Loan origination and monitoring fees, and such other necessary fees of consultants and agents retained to administer the Program. MOHCD may use Bond Proceeds to pay such fees or may charge such fees to Applicants and Borrowers. MOHCD may also require Applicants and Borrowers to defend and indemnify the City against future claims, liabilities, and losses related to its administration of the Program as a condition precedent to making a Loan.

(f) Combining Loans. MOHCD may issue to a particular Property any number of Below Market Rate Loans, Market Rate Loans, and Deferred Loans in any combination thereof that the Director deems appropriate 1

(Added as Sec. 66.3 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

(Former Sec. 66.4 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.5 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

CODIFICATION NOTE

1 . So in Ord. 270-18.

SEC. 66.5. LOAN TERMS.

SEC. 66.4. LOAN.1

All loans made under the Program shall be fully repaid over such periods as set forth in the Program Regulations but in no event for a term greater than 55 years, on such terms as the Director shall establish and deem appropriate, including but not limited to, loans the principal and/or interest of which are repaid in a single lump sum at the maturity of such loan. Principal and interest Loan repayments will be deposited into the Fund pursuant to the terms of the Program Regulations. All payments of principal and interest collected in connection with Below Market Rate Loans shall be remitted to the Controller’s office to be applied toward repayment of the Bonds associated with such Loans. All payments of principal, and the amount of interest equal to the City Cost of Funds, collected in connection with Market Rate Loans shall be remitted to the Controller’s Office to be applied toward repayment of the Bonds associated with such Loans. At the discretion of the Director, payments of interest in excess of the City Cost of Funds collected in connection with Market Rate Loans may be deposited into the Fund.

(Added as Sec. 66.4 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

(Former Sec. 66.5 added by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated as Sec. 66.6 and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

CODIFICATION NOTE

1 . So in Ord. 270-18.

SEC. 66.6. PRESERVATION OF HOUSING.

(a) Any Below Market Rate Loan made under the Program shall be subject to a Declaration of Restrictions. The term of the Declaration of Restrictions shall be sufficient to ensure that units acquired, improved, or rehabilitated remain affordable for as long as all or any portion of the buildings financed with the Loan operate as multi-family residential facilities.

(b) Market Rate Loans made under the Program shall be subject to a Declaration of Restrictions only to the extent set forth in the Program Regulations. The repayment liability for funds from any Market Rate Loan used for rehabilitation of a residential building shall not be passed through to tenants as a capital improvements rent increase or otherwise.

(Added as Sec. 66.5 by Ord. 1-93, App. 1/7/93; amended by Ord. 1-01, File No. 001968, App. 1/12/2001; Ord. 122-06, File No. 060386, App. 6/14/2006; redesignated and amended by Ord. 270-18, File No. 180890, App. 11/9/2018, Eff. 12/10/2018)

(Former Sec. 66.6 added by Ord. 1-93, App. 1/7/93; amended by Ord. 287-96, App. 7/12/96; repealed by Ord. 1-01, File No. 001968, App. 1/12/2001)

SEC. 66.7. LENDING CRITERIA.

Applicants must satisfy the underwriting criteria set forth in the Program Regulations, including but not limited to, appropriate loan-to-value and debt service coverage ratios, reserve requirements, credit worthiness, scope of work, experience, and such other factors as the Director deems appropriate.