Cal. Health and Safety Code § 50675.7

Loans shall be provided using a project selection process established by the department that meets all of the following requirements: (a) To the extent feasible, this process shall be coordinated with the processes of other major housing funding sources, including that of the California Tax Credit Allocation Committee, and shall ensure a reasonable geographic distribution of funds. (b) The process shall require that applications for projects meet minimum threshold requirements, including, but not limited to, all of the following: (1) The proposed project shall be located within reasonable proximity to public transportation and services. (2) Development costs for the proposed project shall be reasonable compared to costs of comparable projects in the local area. (3) The proposed project shall be feasible. (4) The sponsor shall have the capacity to own and develop the proposed project. (c) Projects that meet threshold requirements shall be evaluated for funding based on weighted underwriting and evaluative criteria that give consideration to projects that meet the following criteria: (1) Serve households at the lowest income levels, consistent with long-term feasibility, considering regional variations. (2) Address the most serious identified local housing needs. (3) Will be developed and owned by entities with substantial and successful experience. (4) Contain a significant percentage of units for families or special needs populations. (5) Leverage other funds in those jurisdictions where they are available. (d) The department may establish alternate project selection processes, threshold requirements, and priorities for funds appropriated for special purposes. These alternate processes, requirements, and priorities shall be tied to the specific needs and objectives for which the funds have been appropriated. (e) Loans for rental housing developments and transitional housing may be reviewed, approved, and funded by the department directly to the sponsor. The department shall ensure that the sponsor notifies the local legislative body of the sponsor’s loan application prior to application submission. (f) The department may make grants to local public entities using funds reserved by the Legislature for rehabilitation, or acquisition and rehabilitation, in support of code enforcement. The local entities shall then make the funds available as loans, and they may be allowed to collect and retain loan repayments, provided that these repayments are reloaned in accordance with the requirements of this chapter, as it relates to funds used in support of code enforcement. (g) The department may establish set-asides for specific project types or projects that serve specific target populations. (h) This section shall become operative on January 1, 2022.