(a) Prior to disbursement of any funds for loans to rental housing developments made pursuant to this chapter, the department shall enter into a regulatory agreement with the sponsor that provides for all of the following:
(1) Sets standards for tenant selection to ensure occupancy of assisted units by eligible households of very low and low income for the term of the agreement.
(2) Governs the terms of occupancy agreements.
(3) Contains provisions to maintain affordable rent levels to serve eligible households.
(4) Provides for periodic inspections and review of yearend fiscal audits and related reports by the department.
(5) Permits a sponsor to distribute earnings in an amount established by the department and based on the number of units in the rental housing development.
(6) Has a term for not less than the original term of the loan.
(7) Contains any other provisions necessary to carry out the purposes of this chapter.
(b) The agreement shall be binding upon the sponsor and successors in interest upon sale or transfer of the rental housing development regardless of any prepayment of the loan.
(c) The agreement shall be recorded in the office of the county recorder in the county in which the real property subject to the agreement is located.
(Added by Stats. 1999, Ch. 637, Sec. 2. Effective January 1, 2000.)