Department of Housing and Community Development loans.

Existing law, the Multifamily Housing Program, is administered by the Department of Housing and Community Development to address renter housing needs through an omnibus multifamily housing program. Under the program, assistance provided to a project is required to be provided in the form of a deferred payment loan to pay for the eligible costs of development. Existing law, subject to specified terms, authorizes the department to approve an extension of an existing loan, the subordination of an existing loan to new debt, or an investment of tax credit equity if the rental housing development is being operated in a manner consistent with the regulatory agreement and the development requires an extension in order to continue to operate in that manner. Existing law also authorizes the department to reduce the interest rate on any loan issued by the department to a rental housing development to as low as 0.42% per annum, or a rate determined by the department that is sufficient to cover the costs of project monitoring, whichever is greater, if the development meets specified requirements regarding, among other things, debt and household income. Existing law also authorizes the Department of Housing and Community Development to approve an extension of a department loan, the subordination of a department loan to new debt, or an investment of tax credit equity under specified rental housing finance programs other than the Multifamily Housing Program, subject to specified conditions. This bill would include loans made under the Multifamily Housing Program and any and all other multifamily housing loans funded or monitored by the department within these latter provisions authorizing the extension of an existing loan, subordination of an existing loan to new debt, or an investment of tax credit equity. The bill would require the department to reduce the interest rate on any loan issued by the department to a rental housing development if the development will utilize low-income housing tax credits, the department makes a specified determination regarding the loan or the ability of the development to syndicate, and the rate change will materially increase the feasibility of the proposed project and ensure long-term affordability for the residents. Existing law also authorizes the department to change the current interest rate for any loan for which it receives a loan extension request, associated with an award of federal or state low income housing tax credits made on or after January 1, 2014, to the applicable federal rate most recently published by the Internal Revenue Service. This bill instead would provide that the department is authorized to change the current interest rate for any loan issued by the department for which it receives a loan extension request, associated with an award of federal or state low-income housing tax credits made on or after January 1, 2014, to the applicable federal rate published by the Internal Revenue Service and in effect at the time of the project closing. Existing law requires the department to charge a fee in an amount sufficient to cover administrative costs associated with a loan modification requested by a borrower pursuant to these provisions. This bill would instead authorize the department to charge the fee.