Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
An issuer may establish a mortgage credit certificate program pursuant to this article.
Article 2 - Mortgage Credit Certificates
California Health and Safety Code — §§ 50197.1-50199.2
Sections (19)
Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
(a)An issuer shall notify the committee if the issuer elects to exchange all or part of the issuer’s authority to issue qualified mortgage bonds for authority to issue mortgage credit certificates. The notification shall include a statement which does both of the following:
(1)Specifies the amount of the qualified mortgage bond authority that the issuer will not be issuing in order to issue mortgage credit certificates.
(2)Explains how the issuer shall assure that the dollar amount of mortgage credit certificate authority will not be exceeded.
(b)An issuer may revoke the election if the issuer notifies the committee that it cannot successfully carry out that exchange.
Amended by Stats. 2025, Ch. 67, Sec. 120. (AB 1170) Effective January 1, 2026.
A mortgage credit certificate may be issued under a mortgage credit certificate program by a local agency pursuant to this chapter and the federal act, as defined by subdivision (g) of Section 50172.
Added by Stats. 1989, Ch. 1069, Sec. 1.
Any local agency may, upon the approval of the California Debt Limit Allocation Committee pursuant to subdivision (d) of Section 8869.85 of the Government Code, by written agreement assign to any other issuer having the authority to issue qualified mortgage bonds under the laws of this state all or any part of the local agency’s allocation pursuant to Sections 50189, 50190, and 50191 for the calendar year. Under the assignment, the issuer shall agree to issue mortgage credit certificates to qualifying homeowners of property located within the territory of the assigning local agency, provided however that if, after a reasonable attempt and for reasons beyond the control of the issuer, the issuer is unable to issue all of the assigned certificates to homeowners of property located within the territory of the assigning local agency, any remaining certificates may be issued to qualifying homeowners of property located within the county within which the assigning local agency is located.
Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
If an issuer elects to exchange all or part of a supplementary allocation of qualified mortgage bonds for authority to issue mortgage credit certificates, the issuance of those mortgage credit certificates shall be subject to the restriction imposed by subdivision (b) of Section 50189.
Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
The requirement that public notice be given that mortgage credit certificates will be issued, prescribed by Section 25(e)(5) of Title 25 of the United States Code, may be satisfied by the issuer or its lenders advertising their issuance at least 90 days prior to the issuance of any mortgage credit certificate. If an issuer is required to file an application with the committee for a qualified mortgage bond allocation, it may commence advertising for the issuance of a mortgage credit certificate on the day it files its application with the committee.
Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
An issuer shall develop and maintain a list of lenders that have entered into an agreement with the issuer who will make loans to qualified holders of mortgage credit certificates, as provided by the federal act, as defined by paragraph (2) of subdivision (g) of Section 50176.
Added by Stats. 1985, Ch. 1399, Sec. 7.5. Effective October 1, 1985.
Notwithstanding any other provision of law, after a list of lenders has been completed by an issuer, after the qualified mortgage bond allocation has been approved by the committee, and after the issuer has made the election to exchange all or part of the issuer’s authority to issue qualified mortgage bonds for authority to issue mortgage credit certificates, the issuer and its lenders shall have 90 days after the allocation is granted by the committee to establish, and file with the committee, a mortgage credit certificate program.
Added by renumbering Section 50199.5 by Stats. 1994, Ch. 1164, Sec. 23. Effective January 1, 1995.
Any issuer that establishes a mortgage credit certificate program may charge a fee which is reasonably sufficient to cover the costs of administering that program.
Amended by Stats. 2016, Ch. 611, Sec. 1. (AB 1920) Effective January 1, 2017. Conditionally inoperative as provided in Section 50199.18.
(a)For purposes of allocating low-income housing credits, the committee is hereby designated as this state’s only housing credit agency for purposes of Section 42(h) of the federal Internal Revenue Code (26 U.S.C. Sec. 42(h)). The committee shall annually determine and shall allocate the state ceiling in accordance with this chapter and in conformity with federal law. The committee shall determine the housing credit ceiling as soon as possible following the effective date of this chapter and thereafter following the commencement of each calendar year. The committee shall undertake any and all responsibilities of housing credit agencies under Section 42 of Title 26 of the United States Code, including
entering into regulatory agreements relating to projects that are granted awards.
(b)The committee shall develop and provide application forms for use by housing credit applicants. The committee shall adopt uniform procedures for submission and review of applications of housing credit applicants, including fees to defray the committee’s costs in administering this chapter. In the committee’s discretion, the fees shall be charged to a housing credit applicant as a condition of submitting an application or as a condition of receiving an allocation or reservation of the state’s current or anticipated housing credit ceiling, or both.
(c)In addition to allocating the current housing credit ceiling, the committee may reserve a portion of the state’s anticipated housing credit
ceiling for a subsequent year for a housing credit applicant.
(d)As a condition to making an allocation of the housing credit
ceiling or a reservation of the anticipated housing credit ceiling for a subsequent year, the committee may require the housing credit applicant receiving the allocation or reservation to deposit with the committee an amount of money as a good-faith undertaking. The committee shall adopt policies for determining when deposits will be required, prescribing procedures for return of deposits, and specifying the circumstances under which the deposits will be forfeited in whole or in part for failure to timely utilize the allocation or reservation provided to the housing credit applicant.
(e)(1) The committee may make any allocation or reservation of the state’s housing credit ceiling to a housing credit applicant subject to terms and conditions in furtherance of the purposes of this part. The committee may
condition an allocation or reservation on the execution of a contract between the housing credit applicant and the committee requiring the housing credit applicant to comply with all the terms of Section 42 of the federal Internal Revenue Code, any applicable state laws, and any additional requirements the committee deems necessary or appropriate to serve the purposes of this chapter, and providing for legal action to obtain specific performance or monetary damages for breach of contract.
(2)No allocations or reservations shall be made pursuant to this subdivision with respect to projects that do not meet the requirements of the qualified allocation plan, and no allocations or reservations shall be made in amounts that do not meet the requirements of paragraph (2) of subsection (m) of Section 42 of Title 26 of the United States Code.
(3)(A) With respect to an allocation or reservation, the committee may establish a schedule of fines for violations of the terms and conditions, the regulatory agreement, other agreements, or program regulations. In developing the schedule of fines, the committee shall establish the fines for violations in an amount up to five hundred dollars ($500) per violation or double the amount of the financial gain because of the violation, whichever is greater.
Except for serious violations, which shall be defined by the committee, a first-time property owner violator shall be given at least 30 days to correct the violation before a fine is imposed. A violation that has occurred for some time prior to discovery is one violation, but fines may be a recurring amount if the violation is not corrected within a reasonable period of time thereafter, as determined by the committee. A property owner may appeal a fine to the committee.
(B)By resolution at a public general committee meeting, the committee shall adopt and may revise the
schedule of fines, which shall include specific violations of the terms and conditions, the regulatory agreement,
other agreements, or program regulations and fine amounts subject to the criteria in subparagraph (A).
(C)All fines received by the committee shall be deposited in the Housing Rehabilitation Loan Fund established in Section 50661.
(D)If a fine assessed against a property owner is not paid within six months from the date when the fine was initially assessed by the committee and after reasonable notice has been provided to the
property owner, the committee may record a lien against the property. Consistent with Sections 1214 and 1215 of the Civil Code, a lien created pursuant to this paragraph shall not be superior to any lien recorded prior to the recording of this lien.
Repealed and added by Stats. 1990, Ch. 166, Sec. 7. Effective June 22, 1990. Conditionally inoperative as provided in Section 50199.18.
The committee may also contract with other entities, including the department and the agency, to aid in the processing and review of applications.
Amended by Stats. 1994, Ch. 1164, Sec. 29. Effective January 1, 1995. Conditionally inoperative as provided in Section 50199.18.
The committee shall adopt and supply forms for eliciting information for purposes of this chapter from housing credit applicants. Housing credit applicants shall provide the committee with any information requested by the committee in performing its duties and responsibilities under this chapter.
Amended by Stats. 1994, Ch. 1164, Sec. 30. Effective January 1, 1995. Conditionally inoperative as provided in Section 50199.18.
Except as specified in the application and as approved by the committee at initial reservation, no allocation or reservation of the housing credit ceiling under this chapter may be transferred by the housing credit applicant, unless the specific, written approval of the committee is obtained prior to the proposed transfer. Any transfer of an allocation or reservation shall be in writing and shall be subject to terms and conditions established by the committee.
Amended by Stats. 1994, Ch. 1164, Sec. 31. Effective January 1, 1995. Conditionally inoperative as provided in Section 50199.18.
(a)The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, or the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and the allocation dates.
(b)The committee shall adopt a qualified allocation plan, as provided in paragraph (1) of subsection (m) of Section 42 of Title 26 of the United States Code. In adopting this plan, the committee shall comply with the provisions of subparagraphs (B) and (C) of paragraph (1) of subsection (m) of Section 42 of Title 26 of the United States Code.
(c)In order to promote the provision of affordable low-income housing within and throughout the state, the committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions:
(1)All housing credit applicants shall demonstrate at the time the application is filed with the committee, that the project meets the following threshold requirements:
(A)The housing credit applicant shall demonstrate there is a need and demand for low-income housing in the community or region for which it is proposed.
(B)The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period.
(C)The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project.
(D)The housing credit applicant shall have and maintain control of the site for the project.
(E)The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances.
(F)The housing credit applicant shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period.
(G)The housing credit applicant shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, supportable debt service, reserves, funds set aside for rental subsidies, and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the basis, as determined by the committee.
(2)The committee shall give a preference to those projects satisfying all of the threshold requirements of paragraph (1) if:
(A)The project serves the lowest income tenants at rents affordable to those tenants; and
(B)The project is obligated to serve qualified tenants for the longest period.
(3)In addition to the provisions of paragraphs (1) and (2) of subdivision (c), the committee shall use the following criteria in allocating housing credits:
(A)Projects serving large families in which a substantial number, as defined by the committee, of all residential units are comprised of low-income units with three and more bedrooms.
(B)Projects providing single room occupancy units serving very low income tenants.
(C)Existing projects that are “at risk of conversion,” as defined by paragraph (4) of subdivision (c) of Section 17058 of the Revenue and Taxation Code.
(D)Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs.
(E)Projects that provide tenant amenities not generally available to residents of low-income housing projects.
(d)For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application, except to break a tie when two or more of the projects have the same rating.
(e)The committee shall allocate credits to a project under this section prior to allocating credit to that project under Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code.
(f)The committee shall allocate credits to a project only if the housing sponsor enters into a regulatory agreement that provides for an “extended use period” as defined in subparagraph (D) of paragraph (6) of subsection (h) of Section 42 of the Internal Revenue Code, which shall terminate on the date specified in the regulatory agreement or the date the project is acquired in foreclosure, including any instrument in lieu of foreclosure, whichever occurs first, and subclause (II) of subparagraph (E) of clause (i) of paragraph (6) of subsection (h) of Section 42 shall not apply.
Amended by Stats. 2022, Ch. 316, Sec. 2. (AB 2873) Effective January 1, 2023. Conditionally inoperative as provided in Section 50199.18.
(a)The committee shall annually submit to the Legislature by April 1 of each year a report specifying, with respect to its activities under this chapter during the previous calendar year, (1) the total amount of low-income housing credits allocated by the committee, (2) the total number of units assisted by the credit that are, or are to be, occupied by households whose income is 60 percent or less of area median gross income, (3) the amount of the credit allocated to each project, the other financing available to the project, and the number of units that are, or are to be, therein occupied by households whose income is 60 percent or less of area median gross income, and (4) sufficient information to identify the project.
(b)The committee shall also include in its annual report to the Legislature, an aggregation of the information which shall be submitted annually by housing sponsors for all projects which have received an allocation in previous years, specifying all of the following:
(1)Information sufficient to identify the project.
(2)The total number of units in the project.
(3)The total number of units assisted by the credit that are required to be occupied by households whose income is 60 percent or less of the area median gross income as a condition of receiving a tax credit.
(4)The total number of units assisted by the credit that are occupied by households whose income is 60 percent or less of the area median gross income.
(c)The committee shall also include in its annual report to the Legislature, any recommendations for improvement in the low-income housing tax credit.
(d)Commencing in the 2025 calendar year, the committee shall include in its annual report to the Legislature an aggregation of the information submitted by housing sponsors for all projects that have received an allocation on or after January 1, 2024, pursuant to the requirements of Section 50199.23.
Added by Stats. 1987, Ch. 658, Sec. 3. Effective September 15, 1987. Conditionally inoperative as provided in Section 50199.18.
All acts and proceedings taken by the committee prior to the effective date of this chapter to allocate the housing credit ceiling for 1987 under the Governor’s proclamation dated February 27, 1987, are hereby confirmed, validated, and declared legally effective.
Amended by Stats. 2000, Ch. 311, Sec. 1. Effective September 7, 2000. Conditionally inoperative as provided in Section 50199.18.
(a)The committee may adopt, amend, or repeal rules and regulations for the allocation of housing credits pursuant to this chapter and Sections 12206, 17053.14, 17058, 23608.2, 23608.3, and 23610.5 of the Revenue and Taxation Code without complying with the procedural requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, except as described in subdivision (b).
(b)The committee shall provide a notice of proposed action as described in Section 11346.5 of the Government Code. The notice of proposed action shall be provided to the public at least 21 days before the close of the public comment period, and the committee shall schedule at least one public hearing as described in Section 11346.8 of the Government Code before the close of the public comment period. The committee shall maintain a rulemaking file as described in Section 11347.3 of the Government Code. The final version of the regulations shall be accompanied by a final statement of reasons as described in subdivision (a) of Section 11346.9 of the Government Code.
(c)These rules and regulations shall be effective immediately upon adoption by the committee.
(d)The committee may also adopt, amend, or repeal emergency rules and regulations pursuant to this chapter and pursuant to Sections 12206, 17053.14, 17058, 23608.2, 23608.3, and 23610.5 of the Revenue and Taxation Code. The adoption, amendment, or repeal of these regulations shall be conclusively presumed to be necessary for the immediate preservation of the public peace, health, safety, or general welfare within the meaning or purposes of Section 11346.1 of the Government Code.
Amended by Stats. 1999, Ch. 893, Sec. 1. Effective January 1, 2000. Note: Temination provision applies to Chapter 3.6, comprising Sections 50199.4 to 50199.23.
This chapter shall remain in effect as long as Section 42 of the Internal Revenue Code, relating to low-income housing credits, remains in effect. However, repeal of this chapter shall not invalidate or in any way affect the duration of any previously allocated low-income tax credits.
Amended by Stats. 2022, Ch. 638, Sec. 1. (AB 1654) Effective January 1, 2023. Conditionally inoperative as provided in Section 50199.18.
(a)Not less than 20 percent of the federal ceiling on low-income housing tax credits shall be set aside for allocation to rural areas as defined in Section 50199.21. Any amount of credit set aside for rural areas remaining after the ranking of credits in the final cycle of any calendar year shall be available for allocation to any eligible project.
(b)Up to 2 percent of the low-income housing tax credit available under this chapter and Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code may be set aside for small developments as determined by the committee. Any amount of credit set aside for small developments remaining after the ranking
of projects in the final cycle of any calendar year shall be
available for allocation to any eligible project.
(c)Not less than the amounts specified in clause (v) of subparagraph (B) of paragraph (1) and paragraph (4) of subdivision (g) of Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code shall be set aside to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.