Cal. Code Regs. Tit. 25, § 7836 - Applications for Management Reserve Funds

(a) Applications for management reserve funds shall be made on the Department's application form and provide all required information.

(b) Assistance from the management reserve account is available only to defray unavoidable cost increases in maintenance, taxes, utility or management costs, or charges for common areas and services, in order to maintain affordable rents in assisted units. Management reserve funds may be used only to the extent that;

(1) the annuity fund payment projected for the development is insufficient to provide rents that are affordable in the assisted units,

(2) there are insufficient annuity funds or excess rent revenues, and

(3) the sponsor can substantiate that the need for such funds is the result of unexpectedly low rent payments, extraordinary operational expenses, uninsured damages, or other extraordinary or unforeseen expenses approved by the Department.

(c) Applications for assistance from the management reserve account, in addition to other information required by the Department shall include:

(1) the anticipated amount of assistance required and the basis for the calculation of that amount,

(2) substantiation of the information required by subdivision (b), including the jeopardy to the fiscal integrity of the development,

(3) information as to how the cost increases will result in unaffordable rents in the assisted units, and

(4) what measures the applicant and sponsor have taken to reduce costs and to maintain the fiscal integrity and affordable rents in the future.

Notes

Cal. Code Regs. Tit. 25, § 7836

Note: Authority cited: Section 50737, Health and Safety Code. Reference: Section 50770, Health and Safety Code.