Chapter 6.7 - Multifamily Housing Program

California Health and Safety Code — §§ 50675-50675.16

Sections (9)

Added by Stats. 1999, Ch. 637, Sec. 2. Effective January 1, 2000.

The Legislature finds and declares all of the following:

(a)Large numbers of California’s renters face excessive housing costs and live in overcrowded or substandard units. Many of these renters also have special housing needs arising from their employment status, age, or disability, and live in communities suffering from a lack of investment.
(b)In previous years, the state has attempted to address the needs of California renters

through a series of small programs operated by the Department of Housing and Community Development, each offering financing targeted at a specific population or building type. These programs were typically highly successful in addressing local housing and community development needs. However, because each individual program came with a unique set of rules, the programs were often costly and time consuming to administer, for both the state and program users.

(c)A more efficient method to address renter housing needs would be to operate one omnibus multifamily housing program modeled upon an existing successful program. This omnibus program would provide a standardized set of program rules and features applicable to all housing types. As particular needs are identified, it may be easily and quickly customized to meet those needs.
(d)It is the intent of the Legislature that the

Multifamily Housing Program created by this chapter constitute this omnibus multifamily housing program, and that it be based on the department’s existing California Housing Rehabilitation Program as established and described in Subchapter 8 (commencing with Section 7670) of Chapter 7 of Part 1 of Title 25 of the California Code of Regulations.

(e)The Multifamily Housing Program is intended to take the place of the following department programs:
(1)The Deferred-Payment Rehabilitation Loan Program established by Chapter 6.5 (commencing with Section 50660).
(2)The Rental Housing Construction Program established by Chapter 9 (commencing with Section 50735).
(3)The Family Housing Demonstration Program established by Section 5 of Chapter 30 of

the Statutes of 1988.

Repeal of the statutes establishing these programs would be administratively problematic because the department still administers a portfolio of loans from these programs. Therefore, in lieu of repeal, it is the Legislature’s intent that no further allocation of funds be made to these programs and that any and all future funds that would have been appropriated to these programs shall be appropriated instead to the Multifamily Housing Program.

Amended by Stats. 2022, Ch. 655, Sec. 3. (AB 2483) Effective January 1, 2023.

(a)This chapter shall be known and may be cited as the Multifamily Housing Program.
(b)Assistance provided to a project pursuant to this chapter, excluding assistance provided pursuant to Section 50675.1.1 or 50675.1.3, shall be provided in the form of a deferred payment loan to pay for the eligible costs of development as hereafter described, or as otherwise specified in subdivision (b) of Section 50675.15.
(c)Except as provided in paragraph (3), on and after January 1, 2008, of the total assistance provided under this chapter, the percentage that is awarded for units restricted to senior citizens, as defined in

paragraph (1) of subdivision (b) of Section 51.3 of the Civil Code, shall be proportional to the percentage of lower income renter households in the state that are lower income elderly renter households, as reported by the United States Department of Housing and Urban Development on the basis of the most recent American Community Survey or successor survey conducted by the United States Census Bureau.

(1)The department shall be deemed to have met its obligation under this subdivision if the assistance awarded is not less than 1 percent below the proportional share.
(2)This subdivision does not require the department to provide loans to projects that fail to meet minimum threshold requirements under subdivision (b) of Section 50675.7.
(3)Assistance for projects funded pursuant to Section 50675.1.1 or 50675.1.3, and assistance for projects meeting the definition in paragraph (3) of subdivision (b) of Section 50675.14 shall be excluded from the total assistance calculation under this subdivision.
(4)The department shall determine the time period over which it will measure compliance with this section, but that period shall not be less than one year or two funding cycles, whichever period is longer.
(5)If, at the end of the time period determined by the department, the total amount of funding for which sponsors have submitted qualified applications is lower than the proportional share, the department may award the remaining funds to units that are not restricted to senior citizens.
(6)The department’s annual report to the Legislature submitted under Section 50408 shall include a breakdown of funding awards between units restricted to senior citizens and units that are not age-restricted.
(d)This chapter shall be administered by the department and the department shall establish the terms upon which loans or grants may be made consistent with the provisions of this chapter.
(e)In any notice of funding availability offered pursuant to this chapter, or for any funding that is to be offered by using rating and ranking criteria that is consistent with the Multifamily Housing Program or the CalHome program authorized by Chapter 6 (commencing with Section 50650), the department may require applicants

to specify the source and amount of funding being applied for. The requirement may be set forth in either the application materials or notice of funding availability. Any requirement imposed by the department pursuant to this subdivision shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code.

(f)Any reference outside this chapter to rating and ranking applications in a manner consistent with the Multifamily Housing Program or CalHome Program authorized by Chapter 6 (commencing with Section 50650), or administering funds consistent with the Multifamily Housing Program or CalHome Program, shall not be interpreted to authorize funding criteria or requirements that conflict with those that are or were approved by the voters through a statewide initiative or

referendum.

(g)This section shall become operative on January 1, 2022.

Amended by Stats. 2018, Ch. 37, Sec. 41. (AB 1817) Effective June 27, 2018.

(a)The department may designate an amount not to exceed 1.5 percent of funds appropriated for use pursuant to this chapter for the purposes of curing or averting a default on the terms of any loan or other obligation by the recipient of financial assistance, or bidding at any foreclosure sale where the default or foreclosure sale would jeopardize the department’s security in the rental housing development assisted pursuant to this chapter. The funds so designated shall be known as the “default reserve.”
(b)The department may use default reserve funds made available pursuant to this section to repair or maintain any rental housing development assisted pursuant to this chapter that was acquired to protect the department’s

security interest.

(c)The payment or advance of funds by the department pursuant to this section shall be exclusively within the department’s discretion, and no person shall be deemed to have any entitlement to the payment or advance of those funds. The amount of any funds expended by the department for the purposes of curing or averting a default shall be added to the loan amount secured by the rental housing development and shall be payable to the department upon demand.

Added by Stats. 1999, Ch. 637, Sec. 2. Effective January 1, 2000.

If an appropriation is made by the Legislature for the purposes of this chapter in an amount of twenty million dollars ($20,000,000) or less, the department may administer the funds with guidelines that shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Title 2 of the Government Code. If an appropriation exceeds twenty million dollars ($20,000,000), the department may administer the funds with guidelines for 15 months, during which time the guidelines shall not be subject to the requirements of Chapter 3.5

(commencing with Section 11340) of Part 1 of Title 2 of the Government Code.

Added by Stats. 2000, Ch. 667, Sec. 1. Effective January 1, 2001.

(a)The department shall include in the annual report required by Section 50408 information that describes all of the following:
(1)The number of projects assisted through the program.
(2)The types of units assisted through the program.
(3)The location and geographical distribution of the projects and units assisted.
(4)The average cost per project, and cost per unit.
(5)The number of projects and units that have been assisted that serve special needs populations and information related to the types of special needs populations served.
(b)After each Notice of Funding Availability issued for the distribution of funds pursuant to the program, the department shall evaluate the ability of projects that serve families or special needs populations to competitively access the program. Based on its analysis, if the department determines that those projects are not able to apply for or to successfully compete for funding, the department shall make the adjustments it deems appropriate to ensure that these populations are adequately served in subsequent Notices of Funding Availability. These adjustments may include, but are not limited

to, making adjustments to threshold requirements, evaluative criteria, or the timing of the issuance of Notices of Funding Availability to ensure that reasonable funding remains available for more complex projects that include the supportive services necessary to serve families and special needs populations.

Amended by Stats. 2007, Ch. 710, Sec. 1. Effective January 1, 2008.

(a)With respect to funds made available under this chapter, the department shall award reasonable priority points for projects to prioritize any of the following:
(1)Infill development.
(2)Adaptive reuse in existing developed areas served with public infrastructure.
(3)Projects in proximity to public transit, public schools, parks and

recreational facilities, or job centers.

(4)Sustainable building methods that are either of the following:
(A)Established in accordance with the criteria listed under paragraph (8) of subdivision (c) of Section 10325 of Title 4 of the California Code of Regulations, or any successor regulation.
(B)Established by the department, in consultation with the California Building Standards Commission for the purposes of funding developments subject to this section and are more stringent than those in subparagraph (A).
(b)The department may utilize other factors in rural areas to promote infill development.

Amended by Stats. 2023, Ch. 780, Sec. 3. (SB 482) Effective January 1, 2024.

(a)This section applies only to projects funded with funds appropriated for supportive housing projects.
(b)For purposes of this section, the following terms have the following meanings:
(1)“May restrict occupancy to persons with veteran status” means that the sponsor may limit occupancy to persons meeting the criteria of paragraphs (1) and (2) of subdivision (j) with respect to either of the following:
(A)Any unit in the development that has not been previously occupied.
(B)Any unit in the development that subsequently becomes vacant, for a period of not more than

120 days following the vacancy.

(2)(A) “Target population” means persons, including persons with disabilities, and families who are “homeless,” as that term is defined by Section 11302 of Title 42 of the United States Code, or who are “homeless youth,” as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.
(B)Individuals and families currently residing in supportive housing meet the definition of “target population” if the individual or family was “homeless,” as that term is defined by Section 11302 of Title 42 of the United States Code, when approved for tenancy in the supportive housing project in which they currently reside.
(c)(1) The department shall ensure that at least 40 percent of the units in each development

funded under the supportive housing program are targeted to one or more of the following populations:

(A) Individuals or families experiencing “chronic homelessness,” as defined by the United States Department of Housing and Urban Development’s Super Notice of Funding Availability for Continuum of Care or Collaborative Applicant Program.

(B) “Homeless youth,” as that term is defined by paragraph (2) of subdivision (e) of Section 12957 of the Government Code.

(C) Individuals exiting institutional settings, including, but not limited to, jails, hospitals, prisons, and institutes of mental disease, who were homeless when entering the institutional setting, who have a disability, and who resided in that setting for a period of not less than 15 days.

(2)The

department may decrease the number of units required to meet the criteria identified in paragraph (1) if the department determines that the program is undersubscribed after issuing at least one Notice of Funding Availability.

(3)Individuals and families currently residing in supportive housing meet the qualifications under this subdivision if the individual or family met any of the criteria specified in subparagraph (A), (B), or (C) of paragraph (1) when approved for tenancy in the supportive housing project in which they currently reside.
(d)Supportive housing projects shall provide or demonstrate collaboration with programs that provide services that meet the needs of the supportive housing residents.
(e)The criteria, established by the department, for selecting supportive housing projects shall give priority to

supportive housing projects that include a focus on measurable outcomes and a plan for evaluation, which evaluation shall be submitted by the borrowers, annually, to the department.

(f)The department may provide higher per-unit loan limits as reasonably necessary to provide and maintain rents that are affordable to the target population.
(g)In an evaluation or ranking of a borrower’s development and ownership experience, the department shall consider experience acquired in the prior 10 years.
(h)(1) A borrower shall, beginning the second year after supportive housing project occupancy, include the following data in their annual report to the department. However, a borrower who submits an annual evaluation pursuant to subdivision (e) may, instead, include this information in the

evaluation:

(A) The length of occupancy by each supportive housing resident for the period covered by the report and, if the resident has moved, the reason for the move and the type of housing to which the resident moved, if known.

(B) Changes in each supportive housing resident’s employment status during the previous year.

(C) Changes in each supportive housing resident’s source and amount of income during the previous year.

(D) The tenant’s housing status prior to occupancy, including the term of the tenant’s homelessness.

(2)The department shall include aggregate data with respect to the supportive housing projects described in this section in the report that it submits to the

Legislature pursuant to Section 50675.12.

(i)The department shall consider, commencing in the second year of the funding, the feasibility and appropriateness of modifying its regulations to increase the use of funds by small projects. In doing this, the department shall consider its operational needs and prior history of funding supportive housing facilities.
(j)Notwithstanding any other provision of law, the sponsor of a supportive housing development may restrict occupancy to persons with veteran status if all the following conditions apply:
(1)The veterans possess significant barriers to social reintegration and employment that require specialized treatment and services that are due to a physical or mental disability, substance abuse, or the effects of long-term homelessness.
(2)The veterans are otherwise eligible to reside in an assisted unit.
(3)The sponsor also provides, or assists in providing, the specialized treatment and services.

Added by Stats. 2022, Ch. 655, Sec. 5. (AB 2483) Effective January 1, 2023.

(a)For purposes of this section, the following definitions shall apply:
(1)“Eligible individual” means an individual who meets both of the following criteria:
(A)The individual is experiencing homelessness, as defined in this chapter.
(B)The individual or head of household is eligible to receive qualifying services.
(2)“Experiencing homelessness” means the same as “homeless” and “homelessness,” as those terms are each defined in Section 578.3 of Title 24 of the Code of Federal

Regulations, as that section read on January 1, 2022, except that people who were homeless upon admission to an institutional setting shall continue to be considered homeless upon discharge, regardless of the length of time residing in the institutional setting. For the purposes of this paragraph, people who have lost their housing as a result of institutionalization, including, but not limited to, institutionalization in skilled nursing facilities, acute care hospitals, psychiatric facilities, jails, and prisons, and have no home to live in upon discharge are considered homeless regardless of the length of time residing in the institutional setting.

(3)“Qualifying services” includes all of the following:
(A)Services received

under the Assisted Living Waiver pursuant to state law and Section 1915(c) of the federal Social Security Act (42 U.S.C. Sec. 1396n(c)).

(B)Services received under the Home and Community-Based Alternatives Waiver pursuant to state law and Section 1915(c) of the federal Social Security Act (42 U.S.C. Sec. 1396n(c)).
(C)Services received under the Program of All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(b)By December 31, 2023, the department shall do both of the following:
(1)With respect to funds made available under this chapter, award

incentives listed in subdivision (c) to project applicants that agree to all of the following:

(A)Set aside at least 20 percent of the project’s units for eligible individuals. If the project includes more than 100 units, the applicant shall agree to set aside no more than 50 percent of the project’s units for eligible individuals.
(B)Demonstrate viability of linking the units to qualifying services.
(C)Accept referrals from local coordinated entry systems.
(2)Partner with the State Department of Health Care Services to determine the most effective way to align qualifying services in housing projects funded under this chapter, including, but not limited

to, expediting enrollment, prioritizing waiver and PACE programs for eligible individuals, reducing administrative barriers to using qualifying services in publicly subsidized housing, creating partnerships between developers and providers of qualifying services, and developing sample memoranda of understanding or contracts between developers and providers of qualifying services.

(c)The department shall offer project applicants the following incentives:
(1)Loan limits for impacted units that are higher than offered to other units for people experiencing homelessness.
(2)An exemption for project applicants to submit a services plan for units set aside under this section, so long as the project applicant has completed

an executed agreement with a provider of qualifying services to offer services in set aside units. The department shall determine whether the qualifying services are provided in a manner that complies with the applicable requirements of Section 8255 of the Welfare and Institutions Code, and that services provided in each project are meeting applicable department requirements governing staff-to-client ratios.

(3)Based on data and a best practice analysis, providers may receive a higher services cap or an exemption from services caps the department imposes.
(4)Allowing project applicants to use funds made available under this chapter for creating alternative care sites for projects aligning with PACE or other service space to offer other qualifying

services to eligible individuals. Alternative care sites shall be funded to operate in a manner consistent with state law, department regulations, and program guidelines.

(d)The department shall engage a consultant to examine to what extent caps are needed on the amount of supportive services that can be paid through project operating budgets on any project funded under this chapter.
(e)No later than 180 days following the first year of operation of a representative sample of projects, with respect to projects receiving incentives under subdivision (b), the department shall

assess tenant outcomes and engage with an evaluator to identify both of the following:

(1)The number and demographics, including age, race, or ethnicity, and presubsidy housing status, of people being served.
(2)Housing retention rates.

Added by Stats. 2024, Ch. 491, Sec. 3. (SB 1500) Effective January 1, 2025. Conditionally inoperative on or after July 31, 2025, as prescribed by its own provisions. Conditionally repealed, by its own provisions.

(a)(1) In the City and County of Los Angeles, where the federal Department of Housing and Urban Development has granted an authority, as defined in Section 34203, a waiver

effective August 17, 2024, to allow household income verifications to occur after a lease contract is signed for unhoused populations seeking entry into projects pursuant to or in connection with Section 5.110 of Title 24 of the Code of Federal Regulations, if an owner or a management agent leases a subsidized unit to an unhoused person and subsequently learns

and verifies that the unhoused person does not meet applicable income requirements, then the department and the California Tax Credit Allocation Committee shall not take any negative actions against the owner or management agent if both of the following conditions are met:

(A) The owner or management agent has cured the noncompliance within 24 months of discovery of the violation.

(B) The local housing authority and continuum of care have developed and posted on their respective internet websites a plan describing how the local housing authority and continuum of care will coordinate with the owner or management agent to move tenants that do not meet applicable income requirements into affordable housing where the tenant is eligible for occupancy within 24 months of discovery of the violation. Income ineligible tenants shall retain their unhoused targeting eligibility.

(2)For purposes of this

subdivision, “negative actions” include, but are not limited to, both of the following:

(A)Issuing negative points on a current or future application.
(B)Imposing a financial penalty.
(b)If an agreement between the owner or management agent and the authority, the department, or the California Tax Credit Allocation Committee restricts a unit to a tenant earning no more than 30 percent of the area median income, the tenant shall be deemed to satisfy

the income requirements of this program during the 24-month period described in paragraph (1) of subdivision (a) if all of the following conditions are met:

(1)The tenant experienced homelessness prior to moving into the unit. For purposes of this paragraph, “homelessness” has the same meaning as “homeless,” as that term is defined in Section 578.3 of Title 24 of the Code of Federal Regulations.
(2)The tenant self-certified household income at no more than 30 percent of the area median income.
(3)A third-party verification shows that the tenant has household income of no more than 50 percent of the area median income, unless the tenant is otherwise eligible pursuant to federal income eligibility requirements.
(4)The tenant’s income certification is fully verified in accordance with the program rules within 90 days of the date the tenant took possession of the unit.
(5)At least 50 percent of the assisted units restricted to 30 percent area median income are occupied by verified, income-eligible households.
(6)The issuing housing authority and continuum of care, in coordination with other public agencies, coordinate with an owner or a management agent and move a tenant found to have a household income of more than 50 percent of the area median income following third-party verification described in paragraph (3) within 24 months of discovery of the violation to an affordable housing unit for which the tenant is eligible without reliance upon the same waiver described in subdivision (a). Income ineligible tenants shall retain their unhoused targeting eligibility.
(c)(1) This section does not modify any other eligibility requirements attached to assistance provided by the Department of Housing and Community Development.
(2)Tenant self-certified date of birth shall be accepted so long as the agreement

between the department and the owner does not impose age-based demographic targeting requirements.

(3)If the conditions described in subdivision (b) are met, absent any rent setting methodology from subsidy programs, a tenant whose adjusted income at move-in exceeded 30 percent area median income shall have an effective rent limit for their unit be redesignated to 50 percent of area median income or, if the tenant’s verified income is higher than 50 percent of area median income, an effective rent limit for their unit be redesignated to an area median income level commensurate with the income level.
(4)Owner or management agents shall discontinue use of the waiver as described in subdivision (a) in the event that more than 50 percent of the assisted units restricted to 30 percent area median income are occupied by households with adjusted incomes at move-in over 30 percent area

median income.

(d)This section shall become inoperative on July 31, 2025, or the final expiration date of a waiver as described in subdivision (a), whichever is later, and, as of January 1 of the following year, is repealed.