(a) If a department loan is extended or subordinated, the department approves the reinstatement of a qualifying unpaid matured loan, or a new tax credit investment occurs, then the department shall enter into a new regulatory agreement with the development’s owner, or amend the existing agreement. The agreement shall be binding upon the development’s owner and successors in interest upon sale or transfer of the development property, regardless of any prepayment of the loan. The agreement shall be recorded in the office of the county recorder in the county in which the development is located. The new or amended regulatory agreement shall:
(1) Set standards for tenant selection to ensure occupancy by the eligible households.
(2) Govern the terms of occupancy agreements.
(3) Restrict rents for assisted units, consistent with this chapter.
(4) Provide for periodic inspections by the department.
(5) Require occupancy and financial reports, and financial audits for the development.
(6) Govern the use of operating income for the development.
(7) Govern the use of reserves for the development.
(8) Have a term for not less than the term of the loan, including any extension.
(9) Include other provisions necessary to carry out the purposes of this chapter.
(b) The development’s owner shall agree to replace or amend any other loan document to accomplish the purposes of this chapter.
(Amended by Stats. 2014, Ch. 680, Sec. 3. (AB 2161) Effective January 1, 2015.)