(a) The department may approve an extension of an existing rental housing development loan or regulatory agreement, if the extension facilitates the reinstatement of a qualifying unpaid matured loan, the subordination of a department loan to new debt, the extraction of equity from a development for purposes set forth in subdivision (c) of Section 50406.4, or an investment of tax credit equity, only if the rental housing development is being operated in a manner consistent with the regulatory agreement and the development requires an extension in order to continue to operate in a manner consistent with this chapter. Each extension shall be for a period of not less than 10 years and each extension shall not exceed 55 years, or 58 years if needed to match the term of tax credit restrictions. The interest rate shall be 3 percent simple interest. All loan payments shall be deferred for the full term of the loan, except for residual receipts payments. These residual receipts payments shall be structured to avoid reducing the amount of payments on local public agency loans resulting solely from changes in the payment terms on the departmentâs loan, and not resulting from fees or other payments to the borrower, and shall otherwise be consistent with the provisions of the departmentâs Uniform Multifamily Regulations or successor regulations. The department may charge a monitoring fee to cover the aggregate monitoring costs it incurs from the date of the recordation of the loan or regulatory documents regarding any of the eligible activities pursuant to this subdivision, and may charge a transaction fee or other fee to cover its costs for processing restructuring transactions. The monitoring fees shall continue until the end of the term of the department regulatory agreement, notwithstanding any payoff of the department loan, and the monitoring fees shall not be diminished in the event of any paydown of the department loan. The department may waive or defer some or all fees, if it determines that a particular development or class of developments does not have the ability to make these payments, or if necessary, in the sole discretion of the department, for the feasibility of the project. In determining the fees and payments to be charged, the department shall seek to share monitoring activities with other regulatory agencies and to minimize the impact on tenants with the lowest incomes and on the capacity of the developments to support private debt or secure tax credit investments. (b) To the minimum extent necessary to support new debt to pay for rehabilitation, but not for extraction of equity, rents for assisted units in these developments may be adjusted pursuant to the department guidelines and Section 42 of the Internal Revenue Code. This rehabilitation shall be determined by the department to be demonstrably necessary, based on third-party assessment and on the departmentâs own inspection, if the department deems an inspection necessary. Assisted units in developments with a specific, department-approved plan to undertake the necessary rehabilitation, at a level that equals or exceeds the minimum per-unit rehabilitation cost standards under the low-income housing tax credit program, may be adjusted as follows: (1) For developments originally financed under the bond-funded component of the Rental Housing Construction Program pursuant to Section 50771.1, and the Family Housing Demonstration Program, rents may be increased up to a maximum of 30 percent of 60 percent of area median income, for units designated in the developmentâs original regulatory agreement as lower income units, and up to a maximum of 30 percent of 35 percent of area median income, for units designated in the developmentâs original regulatory agreement as very low income units. (2) For developments originally financed under other programs that calculate income levels and rent limits consistent with the calculation methodology used under the low-income h
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