(a) The department may make loans from the Mobilehome Park Rehabilitation and Purchase Fund to a qualified nonprofit housing sponsor or a local public entity to acquire or rehabilitate a mobilehome park, provided that no less than 30 percent of residents at the time that the loan application is filed are low income.
(b) Loans may be provided pursuant to this section where either of the following applies:
(1) The park to be acquired has significant outstanding violations of the Mobilehome Parks Act (Part 2.1 (commencing with Section 18200)) that threaten the long-term viability of the park and that will be remedied by the purchaser.
(2) The department determines that the acquisition or rehabilitation of the park will have a substantial benefit to low- and moderate-income homeowners and that the nonprofit housing sponsor or local public entity agrees to maintain rents at levels affordable to lower income households.
(c) (1) Any mobilehome park purchased by a local public entity with a loan pursuant to this section shall be transferred to a qualified nonprofit housing sponsor or to a resident organization that plans to convert the park to resident ownership no later than three years from the date of loan closing, with all obligations under the loan assumed by the nonprofit organization or resident organization.
(2) If a local public entity has made a good faith effort, but has not been able, to transfer the park by the end of the three-year period, the entity may apply to the department for an additional three-year extension. Upon a determination by the department that the local public entity has made a good faith effort to transfer the park in accordance with paragraph (1), it shall have an additional three years from the expiration date of the first three-year period to consummate the transfer. The three-year extension shall only be granted once by the department for each loan to a local public entity.
(3) If a local public entity fails to make a good faith effort to transfer the park within the first three-year period, as determined by the department, or fails to transfer the park by the expiration date of the extended three-year period, it shall repay the loan in full to the department.
(d) All of the following shall apply to loans provided pursuant to this section:
(1) Loans shall be for a term of no more than 40 years and shall bear interest at a rate of 3 percent per annum unless the department finds that a lower interest rate is necessary and will not jeopardize the financial stability of the fund.
(2) The department may establish flexible repayment terms for loans provided pursuant to this section if the terms do not represent an unacceptable risk to the security of the fund.
(3) Loans shall be for the minimum amount necessary to bring the park into compliance with all applicable health and safety standards and to maintain the monthly housing costs of lower income residents at an affordable level.
(4) The total secured debt in a superior position to the department’s loan plus the department’s loan shall not exceed 115 percent of the value of the collateral securing the loan plus the amount of costs incidentally, but directly, related to the acquisition and rehabilitation of the park.
(5) For loans issued on and after January 1, 2019, notwithstanding paragraphs (1) and (2), loan repayments shall be deferred for the full term of the loan. The department shall charge a transaction fee to cover its costs for processing these restructuring transactions. The department may waive or defer some or all of this fee if it determines that the residents of the mobilehome park do not have the ability to make these payments.
(6) For loans issued on and after January 1, 2019, principal and accumulated interest is due and payable upon completion of the term of the loan. The loan shall bear simple interest at the rate of 3 percent per annum on the unpaid principal balance. The department shall require annual loan payments in the minimum amount necessary to cover the costs of project monitoring.
(e) In determining the eligibility for and amount of loans pursuant to this section, the department shall take into consideration, among other factors, all of the following:
(1) The current health and safety conditions in the park and the likelihood that conditions would be remedied without the loan.
(2) The degree to which the loan will benefit lower income homeowners.
(3) The age of the park and the age of the infrastructure that will be rehabilitated with the loan proceeds.
(f) Before providing financing pursuant to this section, the department shall require provision of, and approve, at least all of the following:
(1) Verification that either no park residents shall be involuntarily displaced as a result of the purchase or that the impacts of the displacement shall be mitigated as required under state and local law. For purposes of this requirement, compliance with Section 66427.5 of the Government Code shall be conclusively presumed to have mitigated economic displacement.
(2) Projected costs and sources of funds for all purchase and rehabilitation activities.
(3) Projected operating budget for the park after the purchase.
(4) A management plan for the operation of the park.
(Amended by Stats. 2018, Ch. 750, Sec. 1. (AB 2056) Effective January 1, 2019.)