California Code of Regulations › Title 25 - Housing and Community Development › Division 1 - Housing and Community Development › Chapter 7 - Department of Housing and Community Development Programs › Subchapter 8 - California Housing Rehabilitation Program › Article 2 - Program Requirements › Section 7674 - Eligible Uses of Funds

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
					 Funds may be used only for eligible costs that are incurred on the project as
					 set forth in this section. In addition, the costs must be necessary and must be
					 consistent with the lowest reasonable cost given consistent with the project's
					 scope and area.
(b) Eligible
					 categories of costs include the following:
(1)
					 acquisition of project property, including existing improvements, and costs
					 related to such acquisition;
(2)
					 refinancing of that amount of debt existing at the time of application which is
					 necessary to achieve rents for low- and very-low income tenants in accordance
					 with program requirements and costs related thereto;
(3) reconstruction, when the estimated cost
					 including demolition, construction and related activities is less than the
					 estimated cost of rehabilitation of the rental housing development;
(4) conversion when the resulting units are
					 of modest design and with modest amenities and when the estimated total
					 rehabilitation cost is less than the new construction cost of comparable units
					 in the area;
(5) costs of
					 rehabilitation necessary to correct code violations and those costs directly
					 related to the correction of code violations;
(6) general costs required to correct unsafe,
					 unhealthy and unsanitary conditions, and which are directly related to the
					 project, including the following:
(A) general
					 property improvements when the sponsor can demonstrate that such improvements
					 are integral to the project;
(B)
					 work related to protecting the physical security;
(C) work related to reducing long-term
					 maintenance costs;
(D) other
					 on-site and off-site improvements.
(7) seismic rehabilitation improvements, and
					 work directly related thereto pursuant to section 7675;
(8) architectural, appraisal, engineering,
					 legal and other consulting costs and fees, which are directly related to the
					 planning and execution of the project and which are incurred through
					 third-party contracts;
(9)
					 administrative expenses pursuant to section 7680;
(10) rent-up costs;
(11) carrying costs during construction,
					 including insurance, financing, and taxes;
(12) building permits and state and local
					 fees;
(13) work lawfully required
					 by a governmental entity which is reasonably required as a condition of project
					 approval to correct unsafe, unhealthy or unsanitary conditions;
(14) relocation benefits and assistance to
					 lower income residential tenants displaced as a result of acquisition and/or
					 rehabilitation. All other temporary and permanent relocation benefits specified
					 in section 7685 are not eligible uses of program funds;
(15) escrow, title insurance, recording and
					 other related costs.