Cal. Code Regs. Tit. 25, § 8212.3 - Deep Targeting Funds

Current through Register 2021 Notice Reg. No. 52, December 24, 2021

(a) For purposes of this section, the term "deep targeting funds" means additional funds awarded to rental projects to provide rents below the 50% of area median income rent level as set forth in the NOFA.

(b) In addition to the maximum award amount set forth in a NOFA, and subject to the provisions of this section, a NOFA may make deep targeting funds available for the purpose of reducing project rents through reduction or elimination of non-public agency debt that requires debt service payments.

(c) The NOFA shall establish the reduced rent levels required in order for a project to be eligible to receive deep targeting funds.

(d) As a result of the reduction in mandatory debt service, all rents shall be maintained at the area median income levels proposed in the HOME application for a minimum of 55 years for cities, counties, Developers and CHDOs and 50 years for projects on Native American Lands as defined in Section 8201(y)(1), pursuant to a HOME regulatory agreement or a regulatory agreement held by another government financing agency.

(e) The following projects shall not be eligible to receive deep targeting funds.

(i) Projects proposing to use nine percent Low Income Housing Tax Credits.

(ii) Rental rehabilitation projects that are not requesting HOME funds for acquisition.

(f) Deep targeting funds shall be allocated only to rental housing projects ranking high enough to be funded pursuant to 8212(b). If the demand for deep targeting funds exceeds the amount made available in the NOFA, projects will be rated and ranked for deep targeting funds as follows:

(i) The higher the percentage of HOME units restricted at or below the deep targeting rent levels set in the NOFA, the more points that will be awarded; and

(ii) The lower the average rent expressed as a percentage of area median income, the more points that will be awarded.

(iii) If a project requesting deep targeting funds does not score high enough on the deep targeting rating factors to receive deep targeting funds, the project will be evaluated pursuant to Section 8212(b) using the rents that are proposed at the regular maximum HOME loan amount, rather than the deep targeting HOME loan amount.

(g) Applicants requesting funds for deep targeting shall submit two sets of documents as requested in the application. One set of documents shall reflect rent levels and project financials if the project is funded at the regular maximum HOME funding level, and one set of documents shall reflect rent levels and project financials if the project is funded with deep targeting funds. Except for differences attributable to reduced nonpublic agency debt, the two project scenarios shall be the same. Although the project unit mix may change with deep targeting funds, the total number of units in the project shall not change. Among the HOME-assisted units, no more than four different rent levels expressed as a percentage of area median income shall be used for each bedroom size.

(h) In rating and ranking applications pursuant to subdivision (f), projects will only be compared to projects in counties with similar HOME median income limits as set forth in the NOFA. Initially, fifty percent of the available deep targeting funds shall be allocated to projects in counties with HOME income limits lower than the identified median income limit in the NOFA, and fifty-percent of the funds shall be awarded to projects in counties with HOME income limits higher than the identified median income limit in the NOFA. Unallocated funds from one group will be made available to the other group.

Notes

Cal. Code Regs. Tit. 25, § 8212.3

Note: Authority cited: Sections 50406 and 50896.3(b), Health and Safety Code. Reference: 24 CFR Sections 92.201, 92.206, 92.218. 92.252 and 92.257; and Sections 50896 and 50896.1, Health and Safety Code.

1. New section filed 12-10-2007; operative 12-10-2007 pursuant to Government Code section 11343.4(Register 2007, No. 50).
2. Amendment of subsection (d) filed 10-31-2016; operative 1-1-2017 (Register 2016, No. 45).