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 4 - Multifamily Housing Program › Article 2 - Program Requirements › Section 7312 - Rent Standards

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Department shall establish Rent limits for Assisted
						Units in each Project in accordance with the following:
(a) Rent limits for initial occupancy and for
					 each subsequent occupancy by a new Eligible Household shall be based on Unit
					 type, applicable income limit, and area in which the Project is located,
					 following the calculation procedures used by TCAC and using the income limits
					 recognized by TCAC for purposes of application scoring as well as the income
					 limits utilized by the Program for this purpose pursuant to Section 7320(b)(1).
					 The maximum Rent limit shall be 30% of 60% of Area Median Income for the
					 appropriate Unit size.
(b) Rents
					 will be further restricted in accordance with Rent and income limits submitted
					 by the Sponsor in its application for the Program loan, approved by the
					 Department, and set forth in the Regulatory Agreement. Rents shall not exceed
					 30% of the applicable income eligibility level.
(c) Rents in Assisted Units may be adjusted
					 no more often than annually. The amount and method of adjustment for Assisted
					 Units shall be in accordance with the regulations and procedures used by
					 TCAC.
(d) The Department may permit
					 an annual Rent increase greater than that permitted by this section if the
					 Project's continued Fiscal Integrity is jeopardized due to factors that could
					 not be reasonably foreseen.
(e) For
					 Units receiving HUD Section 8 or other similar rental assistance, the rules of
					 the rental assistance program pertaining to Rent increases will prevail for as
					 long as the rental assistance remains in place. Changes in the tenant
					 contribution amounts may occur more often than annually as required by the
					 rental assistance program.
(f)
					 Where a Project is receiving renewable Project-based rental assistance:
(1) the Sponsor shall in good faith apply for
					 and accept all renewals available;
(2) the Sponsor shall fund a transition
					 reserve to be used in the event the rental assistance contract is terminated.
					 The transition reserve shall be in an amount sufficient to prevent, for two
					 years, Rent increases for Units that formerly received rental assistance and
					 were restricted to households with incomes not exceeding a percentage of State
					 Median Income, expressed as a percentage of Area Median Income. The transition
					 reserve may be capitalized or funded from annual project cash flow in amounts
					 to be approved by the Department. Use of funds in the reserve shall be subject
					 to the review and approval of the Department; and
(3) if the Project-based rental assistance is
					 terminated, Rents for Units previously covered by this assistance may be
					 increased above the levels allowed pursuant to subsection (c), above, but only
					 to the minimum extent required for Fiscal Integrity, as determined by the
					 Department. In addition, Rents for such Units restricted to households with
					 incomes not exceeding a percentage of State Median Income, expressed as a
					 percentage of Area Median Income, shall not in any event be increased to an
					 amount in excess of 30% of 50% of Area Median Income, adjusted by number of
					 bedrooms in accordance with TCAC requirements.