(a) A program administrator shall determine before executing an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed until this determination is made, that the property owner has a reasonable ability to pay the annual payment obligations for the PACE assessment based on the property ownerâs income, assets, and current debt obligations. The determination process shall be based on the following factors: (1) The property owner shall submit on their application their monthly income and their monthly housing expenses. (2) Housing expenses shall include all mortgage principal and interest payments, insurance, property taxes, mortgage guaranty insurance, and other preexisting fees and assessments on the property. (3) Household income shall include the income of the mortgagor on the subject property and may include the income of any persons 18 years of age or older who are on title to the property. In complying with this paragraph, the program administrator shall do both of the following: (A) The program administrator may also utilize the income of a property ownerâs legal spouse through marriage, as defined by Division 3 (commencing with Section 300) of the Family Code, or domestic partnership, as defined by Division 2.5 (commencing with Section 297) of the Family Code, who is not on title to the property. Any spouse or domestic partner who is not on title to the property shall consent, in writing, to the inclusion of his or her income and to the verification of his or income as required pursuant to this section. (B) For any person whose income is considered, the program administrator shall also consider their debt obligations pursuant to this section. The program administrator is not required to consider more income than is necessary, nor to verify assets if verified income is sufficient to determine the ability of the property owner to pay the annual payment obligations. (4) Debt obligations in accordance with subdivision (c). (5) In evaluating the income, assets, and current debt obligations of the property owner, the program administrator shall not consider the equity of the property that will secure the assessment contract. (6) Pursuant to Section 5913 of the Streets and Highways Code, the program administrator shall ask the homeowner open-ended questions during the oral confirmation of key terms call, to confirm the income provided on the application and to identify the sources of their income. (b) (1) The program administrator shall determine and consider the current or reasonably expected income or assets of the property owner that the program administrator relies on in order to determine a property ownerâs ability to pay the PACE assessment annual payment obligations using reasonably reliable third-party records of the property ownerâs income or assets. The program administrator may use automated verification provided the source of that verification is specific to the income of the property owner and not based on predictive or estimation methodologies, and has been determined sufficient for those verification purposes by a federal mortgage lending authority or regulator. Examples of records the program administrator may use to verify the property ownerâs income or assets include: (A) A pay stub showing the most recent 30-day pay period or financial institution records showing regular deposits consistent with reported income for the most recent 60 days. (B) Copies of the most recent tax returns the property owner filed with the Internal Revenue Service or the Franchise Tax Board. (C) Copies of the most recent Internal Revenue Service Form W-2 (Wage and Tax Statement), or other similar Internal Revenue Service forms that are used for reporting wages or tax withholding. (D) Payroll statements, including the Department of Defense Leave and Earnings Statement (LES). (E) Financial institution rec
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