Crescent City City Council
December 1, 2025

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
2) Use of, or permitting the use of, Grant funds provided under this Agreement for any ineligible costs or for activities not approved under this Agreement.
3) Any failure to comply with the deadlines set forth in this Agreement.

B. In addition to any other remedies that may be available to the Department in law or equity for breach of this Agreement, the Department may:
1) Bar the Contractor from applying for future PLHA and other HCD funds; 2) Revoke any other existing PLHA award(s) to the Contractor; 3) Require the return of any unexpended PLHA funds disbursed under this Agreement;
4) Require repayment of PLHA funds disbursed and expended under this agreement;
5) Require the immediate return to the Department of all funds derived from the use of PLHA funds including, but not limited to recaptured funds and returned funds;
6) Seek, in a court of competent jurisdiction, an order for specific performance of the defaulted obligation or the appointment of a receiver to complete the technical assistance in accordance with the PLHA Program requirements; and,
7) Seek such other remedies as may be available under the relevant agreement or any law.

C. All remedies available to the Department are cumulative and not exclusive.

D. The Department may give written notice to the Contractor to cure the breach or violation within a period of not less than fifteen days.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

10. Termination
A. The Department may terminate this Agreement at any time for cause by giving a minimum of thirty days’ notice of termination, in writing, to the Contractor. Cause shall consist of, violations of any terms and/or special conditions of this Agreement, the PLHA Statutes, or the NOFA. Upon termination of this Agreement, unless otherwise approved in writing by the Department, any unexpended funds received by the Contractor shall be returned to the Department within thirty days of the notice of termination.

B. This Agreement is subject to any additional restrictions, limitations or conditions, or statute, regulations or any other laws, whether federal or those of the State of California, or of any agency, department, or any political subdivision of the federal or the State of California governments, which may affect the provisions, terms or funding of this Agreement in any manner.

C. The Department has the option to terminate this Agreement under the thirty-day cancellation clause or to amend this Agreement to reflect any reduction of funds.

11. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of the Department to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Contractor of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the Department to enforce these provisions.

12. Relocation
Contractor shall comply with all requirements of applicable California relocation law (Gov. Code, § 7260 et seq. and the regulations promulgated thereunder at Cal. Code Regulations, Title. 25, § 6000 et seq.). Any relocation plan for the Development shall be subject to the review and approval by the State.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

13. Special Conditions Contractors and Subrecipients
The Contractor agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E. These conditions shall be met to the satisfaction of the Department prior to disbursement of funds. The Contractor shall ensure that all Subrecipients are made aware of and agree to comply with all conditions of this Agreement and the applicable State requirements governing the use of Grant funds. The Contractor shall ensure that all Subrecipients are qualified to do business and in good standing with the California Secretary of State and the California Franchise Tax Board. Failure to comply with these conditions may result in cancellation of this Agreement.

14. Compliance with State and Federal Laws, Rules, Guidelines and Regulations The Contractor agrees to comply with all State and Federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the Grant, the Contractor, its Subrecipients, and any other Grant activity.

15. Litigation
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of the Department, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Contractor shall notify the Department immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or the Department and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of the Department.

City of Crescent City
23-PLHA-18498

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

PROGRAM-SPECIFIC PROVISIONS AND SPECIAL CONDITIONS

1. Program-Specific Provisions
The following are project-specific terms and conditions (referred to as enumerated provision(s) for ease of reference in prior exhibits) and shall inform the references made to project-specific information not contained in those prior exhibits.

Budget Detail:

Contractor has been awarded the following grant activity amounts for 2020: $125,660 Contractor has been awarded the following grant activity amounts for 2021: $142,274 Contractor has been awarded the following grant activity amounts for 2022: $76,264 Estimated five-year allocation may not exceed: $485,092 Payees:

A. The authorized Payee(s) is/are as specified below:

Name: City of Crescent City Total Amount: $344,198
Plan:

Activity 1- The City of Crescent city plans to direct 100% of the City’s PLHA funding to Activity (1) to the development of new affordable rental housing projects serving households earning up to 120% of the Area Median Income.

Funding Allocation Year 2019 2020 2021 2022 2023
Type of Activity N/A
Affordable
Rental
Housing
Affordable
Rental
Housing
Affordable
Rental
Housing
Affordable
Rental
Housing
Percentage of Funds
Allocated for Each Activity N/A 95% 95% 95% 95%
Area Median Income
Level Served N/A 120% 120% 120% 120%
Administrative Costs N/A 5% 5% 5% 5%
City of Crescent City
23-PLHA-18498

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
Total N/A 100% 100% 100% 100%

2. Special Conditions
The following Special Conditions are applicable to this Standard Agreement:

None.

Exhibit A-2: Permanent Local Housing Allocation Final Guidelines [see attached]
Permanent Local Housing Allocation
Final Guidelines
Gavin Newsom, Governor
State of California
Alexis Podesta, Secretary
Business, Consumer Services and Housing Agency
Douglas R. McCauley, Acting Director
California Department of Housing and Community Development 2020 West El Camino Avenue, Suite 150
Sacramento, CA 95833
October 2019
Department of Housing and Community Development 2 2019 PLHA Final Guidelines The matters set forth herein are regulatory mandates, and are adopted in accordance with the authorities set forth below:

Quasi-legislative regulations … have the dignity of statutes … [and]… delegation of legislative authority includes the power to elaborate the meaning of key statutory terms… Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999) In consultation with stakeholders, the California Department of Housing and Community Development (Department) may adopt Guidelines to implement this Section, including determining allocation methodologies. Any guideline, rule, policy, or standard of general application employed by the Department in implementing this chapter shall not be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Title 2 Government Code, Part 1 of Division 3).

NOTE: Authority Cited: Health and Safety Code Section 50470, subdivision (d).

The Department reserves the right, at its sole discretion, to suspend or amend the provisions of these Guidelines, including, but not limited to, grant award amounts.

Department of Housing and Community Development 3 2019 PLHA Final Guidelines

INTRODUCTION
Chapter 364, Statutes of 2017 (SB 2, Atkins) was part of a 15-bill housing package aimed at addressing the state’s housing shortage and high housing costs. Specifically, it establishes a permanent source of funding intended to increase the affordable housing stock in California. The revenue from SB 2 will vary from year to year, as revenue is dependent on real estate transactions with fluctuating activity. The legislation directs the California Department of Housing and Community Development (Department) to use 70 percent of the revenue collected, beginning in calendar year 2019, to provide financial assistance to local governments for eligible housing-related projects and programs to assist in addressing the unmet housing needs of their local communities. This program is hereafter referred to as the Permanent Local Housing Allocation (PLHA) program.

Guidelines for the PLHA program are organized into five Articles as follows:

Article I. General provisions: This article includes information on the purpose of the Guidelines, program objectives, and definitions used throughout the document.

Article II. Program funding: This article describes allocation formulas and methodologies, and award amounts.

Article III. Formula allocation component: This article describes the requirements for Applicants to apply for funds under the formula allocation of the PLHA program.

Article IV. Competitive allocation component: This article describes requirements and uses for PLHA competitive allocation funds.

Article V. Administration: This article describes administrative functions such as terms, non-performance remedies, and reporting and monitoring requirements.

Department of Housing and Community Development 4 2019 PLHA Final Guidelines Permanent Local Housing Allocation (PLHA) Program:
2019 Guidelines
Table of Contents
ARTICLE I. GENERAL PROVISIONS 5
Section 100. Purpose and Scope 5
Section 101. Definitions 5
ARTICLE II. PROGRAM FUNDING 9
Section 200. Allocations 9
Section 201. Award Amounts 10
ARTICLE III. FORMULA ALLOCATION COMPONENT 11
Section 300. Eligible Applicants 11
Section 301. Eligible Activities 12
Section 302. Threshold Requirements 13
Section 303. Application Review 16
Section 304. Deadlines and Funding Requirements 17
ARTICLE IV. COMPETITIVE ALLOCATION COMPONENT 17
Section 400. Eligible Applicants 17
Section 401. Eligible Activities 18
Section 402. Threshold Requirements 18
Section 403. Selection Criteria 20
Section 404. Application Review 22
Section 405. Deadlines and Funding Requirements 23
ARTICLE V. ADMINISTRATION 23
Section 500. Accounting Records 23
Section 501. Audits/Monitoring of Project Files 24
Section 502. Cancellation and Termination 25
Section 503. Reporting 26
Department of Housing and Community Development 5 2019 PLHA Final Guidelines ARTICLE I. GENERAL PROVISIONS
Section 100. Purpose and Scope
(a) These Guidelines (hereinafter “Guidelines”) implement, interpret, and make specific Chapter 364, Statutes of 2017 (SB 2, Atkins - hereinafter “SB 2”) as authorized by Health and Safety Code (HSC) Section 50470, which created the Building Homes and Jobs Trust Fund and the PLHA program. The principal goal of this program is to make funding available to eligible local governments in California for housing-related projects and programs that assist in addressing the unmet housing needs of their local communities. Twenty percent of the funding in the Building Homes and Jobs Trust Fund is required to be expended for Affordable Owner-Occupied Workforce Housing, and the program prioritizes investments that increase the supply of housing to households that are at or below 60 percent of the Area Median Income (AMI), adjusted for household size.
(b) These Guidelines establish terms, conditions, and procedures for local governments to submit applications to the Department for funds from the PLHA program’s three components, as listed below:
(1) Entitlement formula component per HSC 50470(b)(2)(B)(i)(I) (2) Non-entitlement formula component per HSC 50470(b)(2)(B)(i)(II) (3) Non-entitlement competitive grant program component per HSC 50470(b)(2)(B)(i)(I) (eligible Applicants are the same as for component 2 above)
(c) The non-entitlement competitive grant program component prioritizes assistance to persons experiencing or At risk of homelessness.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(A), subdivision (b)(2)(B)(i) and subdivision (b)(2)(B)(ii)(I-V).

Section 101. Definitions
All terms not defined below shall, unless their context suggests otherwise, be interpreted in accordance with the meanings of terms described in HSC Section 50470. (a) “Accessory dwelling unit” (ADU) means a dwelling unit which is attached, detached or located within the living area of the existing dwelling or residential dwelling unit and which provides complete independent living facilities for one or more persons pursuant to Government Code (GC) Section 65852.2 and 65852.22. It shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family dwelling. An Accessory dwelling unit also includes the following: an efficiency unit, as defined in Section 17958.1 of the HSC, or a manufactured home, as Department of Housing and Community Development 6 2019 PLHA Final Guidelines defined in Section 18007 of the HSC.
(b) "Activity" means any single eligible undertaking carried out as part of an Applicant's allocation(s) under the Program.
(c) “Affordable” means a housing unit that satisfies at least one of the following criteria:

1. If the unit is being rented to low-income, Very low-income or Extremely low-income households, it complies with the Multifamily Housing Program guidelines Section 7312 and the Section 7301 definition of “Affordable Rent”; or

2. If the unit is being sold, it is offered at an “Affordable housing cost”, as published in the Fannie Mae Selling Guide, Part B, Debt to Income Ratios, as updated annually
(https://www.fanniemae.com/content/guide/selling/b3/6/02.html#DTI.20Rat ios), and it complies with the income limits stated in the definitions of Moderate-Income and Lower-Income in this section; or

3. If the unit is being rented to Moderate-Income households, it is available at a gross rent, including a utility allowance, that does not exceed 30 percent of the applicable income eligibility level, and complies with the definition of Moderate-Income in these guidelines
(d) "Affordable Owner-Occupied Workforce Housing" (AOWH) means owner-occupied housing per HSC Section 50092.1 that is affordable to persons and families of low or moderate income, as that term is defined in HSC Section 50093, except in High-cost areas where Moderate-income shall include households earning up to 150 percent of AMI.
(e) “Annual Progress Report” (APR) means the Housing Element APR required by GC Section 65400 on the prior year’s activities and due to the Department April 1 of each year.
(f) “Annual Report" means a form issued by the Department and completed by a Local government awarded PLHA funds on which the Local government documents the uses and expenditures of any allocated funds and outcomes achieved. (g) "Applicant" means an eligible Local government applying for the program to administer one or more eligible activities. Applicant also means a Local or Regional Housing Trust Fund delegated by an eligible Local government to apply for the program and administer its allocation in accordance with all program rules.

Department of Housing and Community Development 7 2019 PLHA Final Guidelines (h) “Area Median Income” or “AMI” means the most recent applicable county median family income published by the Department, available at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml (i) “At risk of homelessness” means the same as defined in Title 24 Section 578.3 of the Code of Federal Regulations and also includes any household receiving rental assistance funded by the California Emergency Solutions and Housing (CESH) program or the California Homeless Emergency Aid Program (HEAP). (j) “Capitalized Reserve for Services” means the reserve funded by the Local government pursuant to Section 301(a)(5) to address project supportive service budget deficits attributable to shortfalls in service funding sources.
(k) “Comprehensive Housing Affordability Strategy” or “CHAS” means annual data compiled by the United States Census Bureau for the U.S. Department of Housing and Urban Development (HUD) to document the extent of housing problems and housing needs, particularly for low-income households.
(l) "Community Development Block Grant" or "CDBG" means the program created pursuant to Title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5301 et seq., as amended.
(m) “Department” means the California Department of Housing and Community Development.
(n) “Extremely Low Income” has the meaning set forth in HSC Section 50106, which is a maximum of 30 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (o) “Fund” means the Building Homes and Jobs Trust Fund pursuant to HSC Section 50470.
(p) “High-cost area” means those counties defined as high cost by the Federal Housing Finance Agency (at: https://www.fhfa.gov/DataTools/ and those counties for which HUD adjusted the Very low income and low-income rents due to high costs (at:
https://www.huduser.gov/portal/pdrdatas_landing.html), as published by the Department in the annual PLHA Notice of Funding Availability.
(q) “Local government” means any city, including a charter city, any county, including a charter county, or a city and county, including a charter city and county.

Department of Housing and Community Development 8 2019 PLHA Final Guidelines (r) “Local Housing Trust Fund” or “Regional Housing Trust Fund” means a public, joint public and private fund or charitable nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code, which was established by legislation, ordinance, resolution (including nonprofit articles of incorporation), or a public-private partnership organized to receive specific revenue to address local or regional housing needs.
(s) “Low or Lower Income” has the meaning set forth in HSC Section 50079.5, which is a maximum of 80 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (t) “Moderate-Income” has the meaning set forth in HSC Section 50093, which is a maximum of 120 percent AMI, or in High-cost areas, 150 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (u) “Non-entitlement local government” means a Local government in an area which is not a metropolitan city or part of an urban county, a Local government that, as of September 1, 2017, was an incorporated city with a population of less than 50,000 or a county with an unincorporated area population of less than 200,000 persons which had not entered into a three-year Urban County Cooperation Agreement, or a Local government that was not otherwise entitled to receive CDBG funds directly from HUD. (v) “Operating subsidies” means payments to owners of affordable housing developments that make the housing more affordable by covering a portion of the ongoing costs of operating the development. Such payments would have the same effect as rental assistance.
(w)“Owner-occupied” means a dwelling which is occupied by the owner and includes a single family dwelling or a dwelling unit in a stock cooperative, as defined by Business and Professions Code (BPC), Section 11003.2, a community apartment project, as defined by BPC Section 11004, or a condominium project, as defined by subdivision (c) of BPC Section 11004. 5.
(x) "Plan" means the document submitted by the Applicant to the Department as part of a complete application in which the Applicant proposes to use allocated funds for at least one eligible Activity. The Plan shall have a term of five years. In succeeding years, the Local government is required to obtain the approval of the Department for any amendments made to the Plan, as set forth in Section 302(c)(5). (y) “Permanent Local Housing Allocation Program", “Program”, or "PLHA" means the program developed to annually allocate 70 percent of the moneys deposited into the Fund pursuant to HSC Section 50470(b)(2)(B)(i).

Department of Housing and Community Development 9 2019 PLHA Final Guidelines (z) “Permanent supportive housing” has the same meaning as in HSC Section 50675.14, that is, housing with no limit on the length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community.

Permanent supportive housing may include associated facilities if used to provide services to housing residents. Permanent supportive housing does not include “health facility” as defined by HSC Section 1250 or any “alcoholism or drug abuse recovery or treatment facility” as defined by HSC Section 11834.02 or “Community care facility” as defined in HSC Section 1502, “Mental health rehabilitation centers” as defined in Section 5675 of the Welfare and Institutions Code (WIC), or other residential treatment programs.
(aa)“Regional Housing Needs Allocation" or "RHNA" means the share of the regional housing need represented by persons at all income levels within the area significantly affected by the general plan of the city or county allocated to an Applicant Local government pursuant to GC Section 65584(b).
(bb)“Sponsor” means the legal entity or combination of legal entities with continuing control of a Rental Housing Development. Where the borrowing entity is or will be organized as a limited partnership, Sponsor includes the general partner or general partners who have effective control over the operation of the partnership, or, if the general partner is controlled by another entity, the controlling entity. Sponsor does not include the seller of the property to be developed as the rental housing Project, unless the seller will retain control of the Project for the period necessary to ensure Project feasibility as determined by the Department.
(cc) “Very Low Income” has the meaning set forth in HSC Section 50105, which is a maximum of 50 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470.5 and 50470, subdivision (b)(2).

ARTICLE II. PROGRAM FUNDING
Section 200. Allocations
(a) SB 2 created a dedicated revenue source for affordable housing and directed the Department to make available 70 percent of the moneys in the Building Homes and Jobs Trust Fund, collected on and after January 1, 2019, to Local governments through the following allocations:

Department of Housing and Community Development 10 2019 PLHA Final Guidelines (1) Ninety percent of the moneys available shall be allocated based on the formula used under Federal law to allocate CDBG funds within California. This is the formula specified in Title 42 United States Code (USC), Section 5306. (A) The amount of funds awarded to each Local government eligible for the entitlement formula component shall be determined by the 90 percent of PLHA funds available pursuant to this paragraph (1) and the percentage of funds received by the entitlement Local government in the CDBG federal fiscal year 2017 allocation process performed by HUD.
(B) Through the formula specified in paragraph (1), the percentage of funds allocated to Non-entitlement local governments shall be distributed to Non-entitlement local governments through a competitive grant program. (2) Ten percent of the moneys available shall be allocated equitably among Non-entitlement local governments. The equitable allocation awarded to each Local government eligible for the Non-entitlement formula component shall be based on the sum of: (1) 50 percent of the funding available for the Non-entitlement formula component divided by the number of local governments eligible for the Non-entitlement formula component and (2) 50 percent of the funding allocated in proportion to each Non-entitlement local government’s share of the total most severe housing need in California’s Non-entitlement local governments, based upon the most recent HUD Comprehensive Housing Affordability Strategy.
(b) After funds are appropriated by the Legislature as part of the budget act, the Department will issue one or more Notices of Funding Availability (NOFA). Local governments shall submit an application under the NOFA pertaining to the specific allocation for which the Local government is eligible.
(c) It is recommended that Local governments that were urban counties in accordance with the distribution of funds pursuant to the formula specified in 42 USC, Section 5306 for the federal fiscal year 2017 provide a proportional share of their allocations to Local governments within their county with which they had a three-year Urban County Cooperation Agreement as of September 1, 2017, provided that these Local governments meet the threshold requirements of the PLHA and expend sub-allocated funds for eligible activities within the deadlines of the Standard Agreement governing the sub-allocation.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

Section 201. Award Amounts
(a) The formula allocation amounts derived pursuant to the formulas in Section 200 will be announced in the NOFA.

Department of Housing and Community Development 11 2019 PLHA Final Guidelines (b) The maximum application amount and the minimum application amount for the competitive allocation will be stated in the NOFA.
(c) An Applicant may apply for its formula allocation from the current and two prior NOFAs for which it did not receive an award, provided that the award meets the requirements of Section 304(a).

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

ARTICLE III. FORMULA ALLOCATION COMPONENT
Section 300. Eligible Applicants
(a) Eligible Applicants for the entitlement formula component described in Section 100(b)(1) are limited to the metropolitan cities and urban counties allocated a grant for the federal fiscal year 2017 pursuant to the federal CDBG formula specified in 42 USC, Section 5306.
(b) Eligible Applicants for the non-entitlement formula component described in Section 100(b)(2) and the competitive grant program component described in Section 100(b)(3) are limited to the Non-entitlement local governments. (c) A Local government may delegate another Local government to submit an application and administer on its behalf its formula allocation of Program funds, provided that the Local governments enter into a legally binding agreement and the funds are expended for eligible Activities and consistent with Program requirements. The delegating Local government shall be identified in the application. The administering Local government shall be responsible for all Program requirements.
(d) A Local government may delegate a Local or Regional Housing Trust Fund to submit an application and administer on its behalf its formula allocation of Program funds, provided that the Local government enters into a legally binding agreement with the Local or Regional Housing Trust Fund and the funds are expended for eligible Activities and consistent with Program requirements. The delegating Local government shall be identified in the application. The Local or Regional Housing Trust Fund shall be responsible for all Program requirements. (e) An Applicant shall not be eligible to receive a new allocation of PLHA funds if it has an uncommitted amount of formula PLHA funds greater than the following:
(1) Four times the pending annual allocation if the pending annual allocation is $125,000 or less;
(2) $500,000 if the pending annual allocation is greater than $125,000 and less than $500,000;
Department of Housing and Community Development 12 2019 PLHA Final Guidelines (3) The amount of the pending annual allocation if the pending allocation is $500,000 or more.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

Section 301. Eligible Activities
(a) Eligible Activities are limited to one or more of the following:
(1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is Affordable to Extremely low-,Very low-, Low-, or Moderate-income households, including necessary Operating subsidies.
(2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days.
(3) Matching portions of funds placed into Local or Regional Housing Trust Funds. (4) Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176. (5) Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing.
(6) Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
(A) This Activity may include subawards to Administrative Entities as defined in HSC Section 50490(a)(1-3) that were awarded CESH program or HEAP funds for rental assistance to continue assistance to these households. (B) Applicants must provide rapid rehousing, rental assistance, navigation centers, emergency shelter, and transitional housing activities in a manner consistent with the Housing First practices described in 25 CCR, Section 8409, subdivision (b)(1)-(6) and in compliance with WIC Section 8255(b)(8). An Applicant allocated funds for the new construction, rehabilitation, and preservation of Permanent supportive housing shall incorporate the core Department of Housing and Community Development 13 2019 PLHA Final Guidelines components of Housing First, as provided in WIC Section 8255, subdivision (b). (7) Accessibility modifications in Lower-income Owner-occupied housing. (8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments. (9) Homeownership opportunities, including, but not limited to, down payment assistance.
(10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more Affordable housing Projects, or matching funds invested by a county in an Affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the Project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an Affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the Affordable housing Project.
(b) A Local government that receives an allocation shall use no more than 5 percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in Section 301 are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation. (c) Two or more Local governments that receive PLHA allocations may expend those moneys on an eligible jointly funded project as provided for in Section 50470 (b)(2)(B)(ii)(IV). An eligible jointly funded project must be an eligible Activity pursuant to Section 301(a) and be located within the boundaries of one of the Local governments.
(d) Entitlement Local governments may use the flow of PLHA funds to incentivize private lender loans and to guarantee payments for some or all public agency bond financings for activities consistent with the uses identified in Section 301 “Eligible Activities”. This loan guarantee Activity must be identified and fully explained in the Applicant’s “Plan”.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivisions (b)(2)(B)(ii)(IV), (b)(2)(D)(i-x), and (b)(3).

Section 302. Threshold Requirements
Applicants must meet all the following threshold requirements for participation in the formula allocation:
(a) Housing Element compliance: The Applicant and any delegating Local government, if applicable, must have a Housing Element that has been adopted by the Local Department of Housing and Community Development 14 2019 PLHA Final Guidelines government’s governing body by the application deadline and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to GC Section 65585. A Local government’s current Housing Element compliance status can be obtained by referencing the Department’s website at http://www.hcd.ca.gov/community-development/housing-element. (b) APR on the Housing Element submitted to the Department: The Applicant and any delegating Local government, if applicable, must submit to the Department the APR required by GC Section 65400 for the current or prior year by the application deadline date.
(1) Please be advised that the Department will not accept other reports in lieu of the APR. Housing Authority Financial Reports, Redevelopment Reports, and other similar reports will not be accepted as meeting this requirement. If uncertain of the status of the report submittal for a Local government, please contact the Department for more information.
(c) Submit, by the deadline specified in the NOFA, on a form made available by the Department, a complete application which shall meet the following minimum requirements:
(1) Application requests an allocation pursuant to Section 200 in order to carry out one or more of the eligible activities described in Section 301. Except for a jointly funded project as described in Section 301(c), any activities must be carried out within the jurisdiction of the Applicant Local government. (2) Submission of the application is authorized by the governing boards of the Applicant.
(3) Certification in the resolution that, if the Local government proposes allocation of funds for any Activity to another entity, the Local government’s selection process shall avoid conflicts of interest and shall be accessible to the public. For the purposes of this paragraph, “entity” means a housing developer or program operator; “entity” does not mean an administering Local government to whom a Local government delegates its PLHA formula allocation, pursuant to Section 300(d).
(4) A Plan detailing:
(A) The manner in which allocated funds will be used for eligible Activities. (B) A description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below 60 percent of AMI. Programs targeted at households at or below 60 percent of AMI will be deemed to meet this requirement.

Department of Housing and Community Development 15 2019 PLHA Final Guidelines (C) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
(D) Evidence that the Plan was authorized and adopted by resolution by the Local government and that the public had an adequate opportunity to review and comment on its content.
(E) The following for each proposed Activity:
(i) A description of each proposed Activity, pursuant to Section 301, and the percentage of funding allocated to it. The description shall specifically include the percentage of funds, if any, directed to AOWH. (ii) The projected number of households to be served at each income level and a comparison to the unmet share of the RHNA at each income level. (iii)A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity.
(iv)The period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least 55 years. (5) The Plan submitted in response to the NOFA shall be for a term of five years. Local governments shall obtain approval of the Department for amendments made to the Plan in each succeeding year of the term of the Plan. Reallocations of more than 10 percent of funds among Activities require amendment of the Plan, with approval granted by the governing body at a publicly noticed public meeting. (6) A certification that, if funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
(A) The PLHA loan and any interest thereon shall be repaid to the Local government’s PLHA account. The Local government shall reuse the repayments consistent with Section 301; or
(B) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or Moderate-Income household; or
(C)The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds Department of Housing and Community Development 16 2019 PLHA Final Guidelines of the equity-sharing agreement consistent with this section. (7) A certification that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make the PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement shall restrict occupancy and rents in accordance with the Local government-approved underwriting of the Project for a term of at least 55 years.
(8) A Program income reuse plan describing how repaid loans will be reused for eligible activities specified in Section 301.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Section 303. Application Review
(a) Applicants must submit a complete application by the deadline stated in the NOFA in order to be eligible for funding. Application forms provided by the Department will be available upon release of the NOFA and will require Applicants to submit the forms and other documents to demonstrate that the Local government has met threshold requirements.
(b) The Department may request additional information to complete its review. (c) Applications recommended for funding are subject to conditions specified by the Department. Applicants will receive an official letter of award after the Department approves funding recommendations.
(d) The Department may issue an Over-the-Counter formula allocation NOFA after completing the NOFA process so that Local governments who were not able to submit formula allocation applications by the application deadline will have another opportunity to do so.
(e) If funding proposed in Local government Plans for AOWH activities is lower than 20 percent of the moneys available in the Fund, the Department may require Local governments to use a specific percentage of their annual formula allocations in some future year for AOWH activities as part of the annual funding process.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(A).

Department of Housing and Community Development 17 2019 PLHA Final Guidelines Section 304. Deadlines and Funding Requirements
(a) The initial PLHA application, including the Plan, must be submitted within 48 months of the budget appropriation (for example, the budget appropriation for 2019 is July 1, 2019, so the application deadline is June 30, 2023). (b) Funds allocated to Local governments that do not submit a complete application by the deadline stated in subsection (a) will revert to the Housing Rehabilitation Loan Fund for the Multifamily Housing Program or for Department-administered technical assistance to Local governments.
(c) A Local government may petition the Department to return any funds allocated to it to be used for the Multifamily Housing Program.
(d) Except for predevelopment expenses for construction projects funded by PLHA and costs to develop and prepare the Plan and the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds. Reimbursement of expenses to prepare the Plan and the PLHA application are subject to the cap on administrative fees. (e) After the Standard Agreement and attachments have been finalized, the Local government will follow provided instructions for signing all required documents. The Local government must submit all supporting materials and a signed Standard Agreement within the timeline provided in the instruction. (f) After the Standard Agreement has been executed by the state, the Local government may submit a request for 100 percent of the funds allocated to be used for eligible expenditures for the Activity(ies) that received the award, and subject to the terms and conditions of the Standard Agreement.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i) and subdivision (b)(2)(B)(ii)(VI).

ARTICLE IV. COMPETITIVE ALLOCATION COMPONENT
Section 400. Eligible Applicants
(a) Eligible Applicants for the non-entitlement competitive allocation described in Section 100(b)(3) are limited to Non-entitlement local governments. For development of Rental Housing Projects, the Sponsor must be a co-Applicant.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I).

Department of Housing and Community Development 18 2019 PLHA Final Guidelines Section 401. Eligible Activities
(a) Eligible Activities are limited to the following and must take place within the jurisdiction of the Applicant Local government:
(1) Development of new multifamily rental housing that is Affordable to households at or below 60 percent of AMI or substantial rehabilitation of multifamily rental housing that will be Affordable to households at or below 60 percent of AMI, but which is not currently restricted as Affordable housing; or (2) Assistance to persons who are experiencing or At risk of homelessness, including, but not limited to, through rapid rehousing, or rental assistance, supportive services and case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers, or new construction, rehabilitation, or preservation of permanent or transitional rental housing.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I)(ia), (b)(2)(B)(i)(I)(ib) and subdivision (b)(2)(B)(ii)(V).

Section 402. Threshold Requirements
Applicants must meet all the following threshold requirements for participation in the competitive allocation:
(a) Housing Element compliance: The Applicant must have a Housing Element that has been adopted by the jurisdiction’s governing body by the application deadline date and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to GC Section 65585. A Local government’s current Housing Element compliance status can be obtained by referencing the Department’s website at http://www.hcd.ca.gov/community-development/housing-element. (b) APR on the Housing Element submitted to the Department: The Applicant must submit to the Department the APR required by GC Section 65400 for the current or prior year by the application deadline date.
(1) Please be advised that the Department will not accept other reports in lieu of the APR. Housing Authority Financial Reports, Redevelopment Reports, and other similar reports will not be accepted as meeting this requirement. If uncertain of the status of the report submittal for a Local government, please contact the Department for more information.
(c) Submit by the deadline specified in the NOFA, on a form made available by the Department, a complete application which shall meet the following minimum requirements:
(1) Application requests a grant pursuant to Section 100(b)(3) in order to carry out one Department of Housing and Community Development 19 2019 PLHA Final Guidelines or both of the eligible Activities set forth in Section 401. (2) Submission of the application is authorized by the governing board of the Applicant and by the developer co-applicant, if any.
(3) Certification in the resolution that, if the Local government proposes allocation of funds for any Activity to another entity, the selection process shall avoid conflicts of interest, and shall be accessible to the public.
(4) Demonstration of readiness, including site control for development Projects, land use entitlements, environmental review and commitments of other funding and resources required, as further set forth in the NOFA;
(5) Underwriting requirements:
(A)Uniform Multifamily Regulations Subchapter 19 of Title 25, Division 1, Chapter 7 (commencing with Section 8300), as amended from time to time, and the Multifamily Housing Program Guidelines (commencing with Section 7300), as amended from time to time, are hereby incorporated by reference into this subchapter and shall apply to Rental Housing Developments receiving assistance under the PLHA competitive allocation. In the event of a conflict between the provisions of Subchapter 19 and these Guidelines, the provisions of these Guidelines shall prevail.
(i) Section 8312(c) of the Uniform Multifamily Regulations is hereby amended to read:
(c) For Projects utilizing 4 percent tax credits, Developer Fee payments shall not exceed the amount that may be included in Project costs pursuant to 4 CCR, Section 10327. In addition, the Developer Fee paid from development funding sources shall not exceed the following:
(1) For acquisition and/or rehabilitation Projects, or adaptive reuse Projects, the lesser of the amount of Developer Fee in Project costs or $2,000,000. (2) For new construction Projects, the base limit shall be the lesser of the amount that may be included in Project costs or $2,200,000. To arrive at the final limit on Developer Fee paid from development funding sources, the base limit shall then be multiplied by a ratio that is the average of (i) the difference between 2 and the Project’s high-cost ratio, as calculated pursuant to 4 CCR, Section 10317(i)(6) or successor language and (ii) 100 percent.
(ii) Section 8312(d) of the Uniform Multifamily Regulations shall not apply. (iii)Section 8314(a)(1)(A) of the Uniform Multifamily Regulations is amended to read:
(A) Approved deferred Developer Fee, pursuant to Section 8312, provided that the aggregate of the Developer Fee paid from sources and paid as deferred shall not exceed $3,500,000.

Department of Housing and Community Development 20 2019 PLHA Final Guidelines (B)Period of affordability: All assisted rental units shall be restricted for not less than 55 years.
(C)All development Projects shall demonstrate fiscal integrity.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Section 403. Selection Criteria
(a) Applications submitted within a competitive funding round shall be evaluated using the following criteria. Total available points shall equal 100.

1. Priority Points – 25 points
A. Population - 5 points
(i) If the Applicant is a county that has a population of 200,000 or less within the unincorporated areas of the county, the Applicant shall receive all points.

B. Prior Award – 5 points
(i) If the Applicant did not receive an award based on the formula specified in 42 USC, Section 5306 in 2016, the Applicant shall receive all points.

And either C (i) or C (ii) or C (iii) below:

C. Activity
(i) Assistance for Homeless Persons through Program Activities – 15 points
(a) Applications to assist persons experiencing or At risk of homelessness, including, but not limited to, through programs providing rapid rehousing, or rental assistance, or operating assistance to navigation centers shall receive all points.

Or
(ii) Assistance to Homeless Persons through Development of Navigation Centers– 15 points
(a) Applications for construction of navigation centers shall receive all points.

Or
Department of Housing and Community Development 21 2019 PLHA Final Guidelines (iii) Assistance for Homeless Persons through Rental Projects – 15 points (a) Applications for the new construction, rehabilitation, or preservation of permanent or transitional rental housing in which all or at least 10 percent of the units are restricted to occupancy by tenants who are homeless or At risk of homelessness shall receive all points.

2. Evaluation Criteria – 75 points
Precise scoring for these factors will be set forth in the NOFA.

A. Community Need – 30 points
(i) Applicants will receive up to a maximum of 30 points based on the rate of households experiencing the most severe housing need according to the most recent HUD CHAS dataset in the Applicant Local government.

Applicants will receive points in proportion to this percentage.

B. Applicant Administrative Experience – 15 points
(i) Applicants with prior experience administering local, state or federal affordable housing or community development programs or who have entered into a contract with an entity with prior experience in the implementation of local, state or federal affordable housing or community development programs will receive up to 15 points.

C. Demonstrated Capacity – 30 points
(i) Capacity points will be based on:
(a) Sponsor experience in Affordable Rental Housing Development and ownership (Up to 30 points) or
(b) Navigation center development experience (for development of these facilities) (Up to 30 points) or
(c) Program Operator experience (for non-development Activities) (Up to 30 points)
(b) Where applications requesting funds for more than one eligible Activity pursuant to Section 401 are permitted by the NOFA, each Activity will receive a separate score for each rating factor, and have an individual Activity total. It is possible that one Activity may score highly enough to receive an award, and the other Activity does not. (c) In the event of tied point scores and insufficient funding for both applications, the Department shall rank the tied applications as follows:
(1) If one of the tied applications is for an Affordable Rental Housing Development and the other is for a program Activity or development of a navigation center, the Department of Housing and Community Development 22 2019 PLHA Final Guidelines Affordable Rental Housing Development application will be selected for funding; (2) If one of the tied applications is for a navigation center and the other is for a program Activity, the navigation center will be selected for funding; (3) If both of the tied applications are for Affordable Rental Housing Developments, the Project with the lowest weighted average affordability of Restricted Units will be selected;
(4) If both of the tied applications are for navigation centers, the facility that provides overnight shelter to the greatest number of people will be selected; (5) If both of the tied applications are for programs, the Local government with the highest rate of households experiencing the most severe housing need according to the most recent HUD CHAS dataset will be selected.
(d) In the event there are insufficient funds to fulfill the entire funding request for the next highest scored application (Application A), the Department will determine whether Application A is feasible without the full funding request. If Application A is not feasible without full funding, the Department may offer the remaining funds to the application whose score is immediately below Application A. If the remaining funds are insufficient to fulfill the funding request for that application (Application B), the Department will again determine whether this application is feasible without the full funding request. If Application B is not feasible without the full funding request, the Department will perform the same analysis for the application whose score is immediately below Application B.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I)(ia) and subdivision (b)(2)(B)(ii)(V).

Section 404. Application Review
(a) Applicants must submit a complete application by the deadline stated in the NOFA in order to be eligible for funding. Application forms provided by the Department will be available upon release of the NOFA and will require Applicants to submit the forms and other documents to demonstrate that the Local government has met threshold requirements. The application will require submission of documentation adequate to demonstrate that the application has earned the appropriate number of points. (b) The Department may request additional information to complete its review, provided that the new information would not affect scoring.
(c) Applications recommended for funding are subject to conditions specified by the Department. Applicants will receive an official letter of award after the Department approves funding recommendations.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Department of Housing and Community Development 23 2019 PLHA Final Guidelines Section 405. Deadlines and Funding Requirements
(a) Applicants will be required to enter into a state Standard Agreement (Standard Agreement) that will set forth conditions for funding and milestones that are required to be met.
(b) After the Standard Agreement and attachments have been finalized, the Local government will follow provided instructions for signing all required documents. The Local government must submit all supporting materials and a signed Standard Agreement within the timeline provided in the instructions or risk forfeiting the grant award.
(c) Except for predevelopment expenses for construction projects funded by PLHA and the costs to develop and prepare the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds.

Reimbursement of expenses to prepare the PLHA application is subject to the cap on administrative fees.
(d) Grant funds shall not be disbursed until:
(1) the Department authorizes loan closing, in the case of development projects; or (2) all general and special conditions have been complied with, in the case of other Activities.
(e) If funds are used for the development of an Affordable Rental Housing Development, the Local government shall make the PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement shall restrict occupancy and rents in accordance with the Department-approved underwriting of the project for at least 55 years.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(VI).

ARTICLE V. ADMINISTRATION
Section 500. Accounting Records
(a) The grantee shall establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the approved work plan, budget, and schedule. Separate bank accounts are not required. (b) The grantee shall maintain documentation of its financial records for expenditures incurred during the course of the PLHA Activity in accordance with generally accepted accounting principles. Such records shall be kept for at least five years after the close-out report is submitted to the Department.

Department of Housing and Community Development 24 2019 PLHA Final Guidelines (c) The Department or its designated representative shall have the right to review and copy any records and supporting documentation pertaining to the PLHA grant.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(III) and subdivision (b)(2)(B)(IV) and subdivision (b)(3).

Section 501. Audits/Monitoring of Project Files
(a) Grantee shall maintain PLHA files which, at a minimum, should include the following information and reports:
1) Project/Activity description
2) Land/site Information
3) Planning & zoning history (as appropriate)
4) Records of public hearings and public comments
5) Relocation needs (as appropriate)
6) Contracts, loan and grant agreements, Standard Agreement 7) Environmental records & reports/findings (as appropriate) 8) Design/engineering reports & plans (as appropriate)
9) Description of targeted beneficiaries, services to be provided, household incomes, special needs
10)PLHA Activity costs, invoices, purchase orders, sources and uses of funds for PLHA Activities, terms & conditions of financings, draws and all supporting documentation, change orders (as appropriate)
11)Activity schedule and amendments
12)History of Plan amendments
13)Procurement policy used for PLHA Activity(ies)
(b) The grantee shall maintain such records for possible audit for a minimum of three years after the close-out report is submitted, unless a longer period of records retention is stipulated in the Standard Agreement.
(c) The grantee shall be responsible for monitoring Rental Housing Developments that received PLHA funds for the term of the loan, including, but not limited to, the Projects’ compliance with the occupancy and rent requirements set forth in the Regulatory Agreement, compliance with reserve requirements, and the compliance with habitability standards.
(d) The grantee shall be responsible for monitoring AOWH loans to assure that the homes remain Owner-occupied.
(e) If requested by the Department, the grantee shall obtain a report from a qualified, Department of Housing and Community Development 25 2019 PLHA Final Guidelines licensed third party that certifies to the amounts of disbursement and identifies the specific Activities for which the disbursements were made. Such a report is permitted to be a component of the A-133 audit.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(IV) and subdivision (b)(3).

Section 502. Cancellation and Termination
(a) In the event that it is determined, at the sole discretion of the Department, that the grantee is not meeting the terms and conditions of the Standard Agreement, the Department shall issue a notice to stop work. Immediately upon receiving the written notice to stop work, the grantee shall cease all work under the Standard Agreement.

The Department has the sole discretion to determine the grantee’s compliance with the terms and conditions after issuance of a stop work order, and to deliver a written notice to the grantee to resume work under this Standard Agreement. (b) The Department shall terminate the Standard Agreement if the grantee is not in compliance with the Guidelines or the terms and conditions of the Standard Agreement. At least 30 days prior to the effective date of the termination of the Standard Agreement, the Department shall provide written notice to the grantee of its intent to cancel the funding allocation. The notice shall specify the reason for early termination and may permit the grantee or the Department to cure any deficiency(ies) prior to the early termination date. The grantee will submit requested documents to the Department within 30 days of the early termination notice. (c) Failure to meet reporting requirements will result in notice to the grantee that it must satisfactorily cure any deficiencies within three months of the notice or it will forfeit the following year’s PLHA formula allocation and be ineligible for a competitive award. The Local government will forfeit subsequent PLHA formula allocations and be ineligible for a competitive award until the Department determines that the Local government has met reporting requirements.
(d) The Department may, as it deems appropriate or necessary, request the repayment of funds from a Local government or offset future years’ funds, or pursue any other remedies available to it by law for failure to comply with the Guidelines and/or the terms and conditions of the Standard Agreement.
(e) Co-Applicants may be adversely impacted by a notice to stop work and/or termination if one grantee is deemed by the Department to not meet the terms and conditions of the Standard Agreement, or fails to meet the reporting requirements outlined in Section 503.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(IV) and subdivision (b)(3).

Department of Housing and Community Development 26 2019 PLHA Final Guidelines Section 503. Reporting
(a) The Department shall provide grantees with reporting formats and instructions. (b) Annual Reports are required from all grantees pursuant to HSC Section 50470(b)(2)(B)(ii)(III) each year by July 31 for the term of the Standard Agreement.

The Annual Report shall document the uses and expenditures of all awarded allocations and outcomes achieved. This report must be signed by both the Local government’s PLHA administrator and the Local government’s City Manager (or his/her designee), or Chief Executive Officer (or his/her designee) or Chief Financial Officer (or his/her designee). The Annual Report must describe any proposed amendment(s) to the approved Activity and schedule.
(c) Upon expenditure of all allocated funds and completion of the Activities funded by PLHA, the grantee shall submit a close-out report, which will be part of the Annual Report.
(d) The Department may request additional information as needed to meet other applicable reporting or audit requirements.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(III) and subdivision (b)(2)(B)(ii)(IV).

Exhibit B-1: PIP Standard Agreement No. 23-PIP-18478
[see attached]
Diana Malimon
12/09/2024
City of Crescent City
23-PIP-18478

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

AUTHORITY, PURPOSE AND SCOPE OF WORK

1. Authority
Pursuant to Health and Safety Code section 50470, subdivision (b)(2)(C)(i), the State of California Department of Housing and Community Development (the “Department” or “State”) has established the Prohousing Incentive Program (“PIP” or the “Program” as defined in Attachment C of the Guidelines) for Local Governments and Localities. This Standard Agreement, along with all its exhibits (the “Agreement”), is entered into under the authority of, and in furtherance of, the purpose of the Program. Pursuant to Health and Safety Code Section 50470, subdivision (d) (“PIP Statute”), the Department has issued the Prohousing Incentive Program Guidelines and Notice of Funding Availability (“NOFA”) dated January 23, 2024, to govern administration of the fund and carry out the Program.

2. Purpose
In accordance with the authority cited above, the Grantee has been awarded financial assistance in the form of a grant from the Program. The Department has agreed to make the grant to provide financial assistance to accelerate housing production for housing related projects and programs that assist in addressing the unmet housing needs of their local communities pursuant to the terms of the PIP Statute, Guidelines and NOFA, and Permanent Local Housing Allocation (PLHA) Statute and Guidelines, and this Agreement. By entering into this Agreement and thereby accepting the award of the Program funds, the Grantee agrees to comply with the terms and conditions of the PIP Statute, Guidelines and NOFA, and PLHA Statute and Guidelines, and this Agreement, the representations contained in the application, and the requirements of the authority cited above. Based on the representations made by the Grantee, the State shall provide a grant in the amount shown in Exhibit B, Section 2, Grant and Reimbursement Limit.

3. Definitions
Terms not otherwise defined herein shall have the same meaning as definitions set forth in Health and Safety Code Section 50470 and Attachment C of the PIP Guidelines and Definition Section (Section 101) of the PLHA Guidelines.

4. Scope of Work
City of Crescent City
23-PIP-18478

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
The “Scope of Work” or “Work” for this Agreement shall be used to accelerate housing production for housing related projects and programs that assist in addressing the unmet housing needs of their local communities. Uses shall consist of one or more of the eligible uses described in Guidelines set forth in the PIP Application, Exhibit E of this Agreement and any other supplemental forms prescribed by the Department in full accordance with this Agreement, PIP Guidelines and PLHA Guidelines Section 301.

Where eligible uses in PIP Guidelines Section 601 differ from PLHA Guidelines Section 301, the Department will defer to PLHA Guidelines except for eligible uses 7 (accessibility modifications) and 10 (fiscal incentives).

A Local government that receives an allocation shall use no more than five percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in the PIP and PLHA Statute and Guidelines are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation.

The Scope of Work may in no event be revised or altered without the Department’s prior written consent and approval, and such consent and approval is within the Department’s sole and absolute discretion. The Department reserves the right, but assumes no obligation, to review and approve any and all Work.

5. Department Contract Coordinator
The Department’s Contract Coordinator of this Agreement is the Housing Policy Development Senior Program Manager, or the Manager’s designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be sent by email to the Department Contract Coordinator at [email protected]. 6. Grantee Contract Coordinator The Grantee’s Contract Coordinator for this Agreement is the Authorized Representative listed below.

Authorized Representative
Name:

Eric Wier
Authorized Representative
Title:

City Manager
Agency Name: City of Crescent City
City of Crescent City
23-PIP-18478

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
Address: 377 J Street
Crescent City, CA 95531
Phone Number: (707) 464-7483
Email Address: [email protected]
City of Crescent City
23-PIP-18478

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

BUDGET DETAIL AND PAYMENT PROVISIONS

1. Application for Funds
A. Grantee has submitted to the Department an Application for a Grant under the Program. The Department is entering into this Agreement on the basis of, and in reliance on fact, information, assertions and representations contained in the Application and any subsequent modifications or additions thereto approved by the Department. The Application and any approved modifications and additions thereto are hereby incorporated into this Agreement.

B. The Grantee warrants that all information, facts, assertions, and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of the Grantee’s knowledge. In the event that any part of the Application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading, in such a manner that would substantially affect the Department's approval, disbursement, reimbursement, or monitoring of the funding and the grant or activities governed by this Agreement, the Department may declare a breach hereof and take such action or pursue such remedies as are provided for breach hereof.

2. Grant and Reimbursement Limit
The Department’s decision to approve or deny an application or request for funding pursuant to the Program, and its determination of the amount of funding provided, shall be final. The maximum total amount granted and disbursable to the Grantee pursuant to this Agreement shall not exceed $650,000.

3. Grant Timelines
A. This Agreement is effective upon approval by all parties and the Department, which is evidenced by the date signed by the Department on page one, Standard Agreement, STD 213 (the “Effective Date”).

B. The grant term begins on the day the Department and the grantee have fully executed the Standard Agreement as described in Exhibit D(1).

C. All reimbursement requests for Grant funds must be submitted to the Department no later than March 30, 2026.

D. Upon completion of all deliverables within the Standard Agreement and prior to processing final invoicing, the awardee shall submit a Close Out Report.

City of Crescent City
23-PIP-18478

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
E. The Grantee shall deliver to the Department all supporting documents of Work performed on or before March 30, 2026, to ensure meeting the June 30, 2026, expenditure deadline. Under special circumstances, as determined by the Department, the Department may modify the March 30, 2026, reimbursement deadline but may not go beyond the expenditure deadline.

F. It is the responsibility of the Grantee to monitor the project and timeliness of requests for reimbursement before the expenditure deadline.

G. The grant term ends on June 30, 2027.

4. Conditions of Reimbursement
A. The Department shall not award or disburse funds unless it determines that the grant funds shall be expended in compliance with the terms and provisions of the Guidelines, the NOFA, and this Agreement.

B. Grant funds shall only be used by the Grantee for project activities approved by the State that involve the preparation and adoption of project activities as stated in the Scope of Work.

C. A Grantee that receives funds under this Program may use a subcontractor. The subcontractor shall provide for compliance with all the requirements of the Program. The subcontract shall not relieve the Grantee of its responsibilities under the Program.

D. After the contract has been executed by the Department and all parties, approved and eligible costs for eligible activities may be reimbursed for the project(s) upon completion of deliverables as set forth in the PIP Application, Exhibit E of this Agreement, and any other supplemental forms prescribed by the Department and subject to the terms and conditions of this Agreement.

Applicants may request disbursements in advance of activity initiation under unique and/or unusual circumstances including but not limited to feasibility, lack of resources, or unavailability of funds.

E. Only approved and eligible costs incurred for work after the NOFA date, continued past the date of execution and acceptance of the Standard Agreement and completed during the grant term until the expenditure deadline will be reimbursable.

F. Approved and eligible costs incurred prior to the NOFA date are ineligible, unless otherwise approved by the Department.

City of Crescent City
23-PIP-18478

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
G. The Contractor may request that eligible uses or grant funds may be revised without an amendment to this Agreement. This request must be made in writing to HCD and shall be effective only upon written HCD approval. HCD’s decision to approve or deny any such request shall be final.

5. Performance
The Grantee shall take such actions, pay such expenses, and do all things necessary to complete the scope of work and within the terms and conditions

6. Fiscal Administration
A. The Grantee is responsible for maintaining records which fully disclose the activities funded by the PIP grant. Adequate documentation for each reimbursable transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Prohousing Incentive Program grant funds. If the allowability of expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and the State shall determine the reimbursement method for the amount disallowed. The State’s determination of the allowability of any expense shall be final.

B. Prior to receiving grants, the Grantee shall submit the following documentation:
1) Government Agency Taxpayer ID Form (GovTIN; Fi$cal form). 2) A Request for Funds on a form and manner provided by the Department; and
3) Any and all additional documentation that may be requested by the Department in the prescribed form and manner.

C. Grant fund payment will be made on a reimbursement basis. Project invoices will be submitted to the Department by the grantee on a quarterly basis or, if earlier, upon completion of deliverables.

D. The Department recognizes that budgeted deliverable amounts are based upon estimates. Grantees may request, in writing, a budget adjustment across deliverables subject to written approval by the Department, as long as the total budget does not exceed the maximum amount awarded to the Grantee.

E. Work must be completed prior to requesting reimbursement, unless otherwise approved by the Department.

City of Crescent City
23-PIP-18478

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
F. Grant funds cannot be reimbursed until this Standard Agreement has been fully executed.

G. The Grantee will be responsible for compiling all invoices and supporting documentation and reporting documents. Invoices must be accompanied by reporting materials where appropriate. Invoices without the appropriate reporting materials will not be paid. Failure to provide requested documentation to HCD could result in exclusion from consideration for grants in future program years.

H. Supporting documentation may include but is not limited to purchase orders, receipts, progress payments, subcontractor invoices, timecards, or any other documentation as deemed necessary by the Department to support the reimbursement to the Grantee for expenses in accordance with the Grantee’s PIP Application and the PIP Guidelines.

I. The Grantee will submit documentation to the Department detailing actual costs incurred, which must be based on clear and completed objectives and deliverables as outlined in the PIP Application, Exhibit E of this Agreement, and any other supplemental forms prescribed by the Department J. In unique and/or unusual circumstances, the Department may consider alternative arrangements (e.g., disbursements in advance of activity initiation) to reimbursement and payment methods. Unusual circumstances include but are not limited to feasibility, unavailable funds or lack of resources and substantial progress in expenditure.

K. The Department may withhold Grant funds until the grant terms have been fulfilled.

L. The Department may withhold eligible Program Grants in future program years until terms of this Agreement have been fulfilled to the satisfaction of the Department.

7. Budget Contingency Clause
A. The Department’s provision of funding to Grantee pursuant to this Agreement is contingent on the continued availability of PIP funds and continued state authorization for PIP activities. The Department’s provision of funding is subject to amendment or termination due to lack of funds or proper authorization. This Agreement is subject to written modification or termination, as necessary, by the Department in accordance with requirements contained in any future state legislation and/or regulations. If funding for any fiscal year is reduced or deleted City of Crescent City
23-PIP-18478

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
for purposes of this program, the Department shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the Department, or amend the current Agreement and amount allocated to Grantee.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

PIP TERMS AND CONDITIONS

1. Effective Date, Commencement of Work
This Agreement is effective upon the date of the Department representative’s signature on page one of the full executed Standard Agreement, STD 213. Grantee agrees that work under this Agreement shall not commence until execution of the STD 213, (the “Effective Date”).

2. Strict Compliance
Grantee will strictly comply with the terms, conditions and requirements of the PIP Statute, Guidelines and NOFA, and PLHA Statute and Guidelines, and this Agreement.

3. Contractor’s Application for Funds
A. Grantee has submitted to the Department an Application for a Grant under the Program.

B. Grantee warrants that all information, facts, assertions and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of Grantee’s knowledge.

4. Eligible Activities
A. Grant funds awarded to the Grantee and expended by either the Grantee or any entity to which Grantee awards funds shall be used for the eligible activities set forth in Exhibit A(4). The following additional requirements shall apply:

B. Each Grantee shall submit a Plan contained in Exhibit E detailing:
1) The manner in which allocated funds will be used for eligible activities. 2) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
3) The following for each proposed Activity:
a) A description of each proposed Activity and the percentage of funding allocated to it.
b) A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
c) Where applicable, the period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least fifty-five years.

C. If funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
1) PIP loan and any interest thereon shall be reused consistent with the Eligible Activities specified in Exhibit A(4); or,
2) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or ModerateIncome household; or, 3) The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds of the equity-sharing agreement consistent with the Eligible Activities specified in Exhibit A(4).

D. If funds are used for the development of an affordable rental housing project, and the Local government makes the PIP assistance in the form of a loan to the Sponsor of the project, the loan shall be evidenced through a Promissory Note secured by a Deed of Trust.

E. If funds are used as a loan, Grantees are required to implement a program income reuse plan describing how repaid loans and any interest thereon shall be reused for Eligible Activities specified in Exhibit A(4).

5. Scope of Work Revisions and Terms/Amendments
A. Adjustments to the terms within this Agreement must be completed as a contract amendment. Contract amendments must be approved by the Department prior to implementation. If approved, contract amendments shall automatically be deemed a part of, and incorporated into, this Agreement. Approval shall be provided in writing, as appropriate. Contract amendments shall include but not be limited to:
1) Changes in the total grant amount;
City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
2) Changes in Payee(s);
3) Changes in the expiration date of this Agreement;
4) Changes to the grant term date;
5) Changes to the Reimbursement Deadline.

B. Revisions to the Scope of Work that may not require a contract amendment will be subject to the review and approval of the Housing Policy Development Senior Program Manager, or Manager’s Designee. Such revisions must be approved by the Department prior to implementation. Approval shall be provided in writing, as appropriate. Adjustments to the Scope of Work (Exhibit E) shall include but not be limited to:
1) An increase or reduction of activity scope;
2) Changes to or reallocations among activities that do not change the total award amount;
3) Changes in affordability and level of affordability for each activity; 4) Changes to activity start and/or completion dates.

6. Core Practices
A Grantee or Subrecipient must provide eligible activities in a manner consistent with the housing first practices described in California Code of Regulations, title 25, section 8409(b)(1)-(6). A Grantee or Subrecipient allocated funds for eligible activities that provide permanent housing shall incorporate the core components of Housing First as provided in Section 8255(b) of the Welfare and Institutions Code.

7. Monitoring Grant Activities
A. Grantee shall monitor the activities selected and awarded by them to ensure compliance with PIP requirements. An onsite monitoring visit of Subrecipients and any other service providers may occur whenever determined necessary by the Grantee, but at least once during the Grant period.

B. The Department will monitor the performance of the Grantee based on a risk assessment and according to the terms of this Agreement. The Department may City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
also monitor any Subrecipients of the Grantee as the Department deems appropriate based on a risk assessment.

C. As requested by the Department, the Grantee shall submit to the Department all PIP monitoring documentation necessary to ensure that Grantee and its Subrecipients are in continued compliance with PIP requirements. Such documentation requirements and the submission deadline shall be provided by the Department at the time such information is requested from the Grantee.

8. Reporting/Audits
A. During the term of the Standard Agreement, the Department may request a performance report that demonstrates satisfaction of all requirements identified in the Standard Agreement and other Program requirements with emphasis on eligible activities, eligible uses, ineligible uses, and expenditures, according to timelines and budgets referenced herein.

B. Grantees shall submit a report, in the form and manner prescribed by the Department, by April 1 of the year following the receipt of funds, and annually thereafter until funds are expended. The annual report shall contain a detailed report which must include, at a minimum:
1) Identification of the Eligible Activities to which the Grantee committed program funds, and the income levels of households assisted; 2) Amounts awarded to Subrecipients with the activity(ies) identified; 3) Identification of the Eligible Activities upon which the Contractor expended program funds, and the income levels of households assisted and the affordability level for any units assisted; and 4) Close out report for contracts that were fully expended and in which all activities funded were completed during the fiscal year.

C. The Department may request additional information, as needed.

D. At any time during the term of the Standard Agreement, the Department reserves the right to perform or cause to be performed a financial audit. At the Department’s request, the Contractor shall provide, at its own expense, a financial audit prepared by a certified public accountant. The State of California has the right to review project documents and conduct audits during and over the project life.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
E. If a financial audit is required by the Department, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in 24 CFR 85.36. 1) The Contractor shall notify the Department of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by the Department to the independent auditor's working papers.
2) The Contractor is responsible for the completion of audits and all costs of preparing audits.
3) If there are audit findings, the Contractor must submit a detailed response acceptable to the Department for each audit finding within ninety (90) days from the date of the audit finding report.

9. Retention and Inspection Records
A. The Contractor is responsible for maintaining records, which fully disclose the activities funded by the Grant. Adequate documentation of each transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Grant funds.

B. The Grantee, its staff, contractors and subcontractors shall establish and maintain an accounting system and reports that properly accumulate incurred project costs by line. The accounting system shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for payment vouchers and invoices.

C. The Eligible Applicant shall maintain documentation of its normal procurement policy and competitive bid process (including the use of sole source purchasing), and financial records of expenditures incurred during the project in accordance with GAAP.

D. The Eligible Applicant must establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the scope of work, project timeline and budget. Separate bank accounts are not required.

E. The Contractor agrees that the Department or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
performance of this Agreement. The Contractor agrees to provide the Department or its designee, with any relevant information requested. 1) The Contractor agrees to permit the Department or its designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with the PLHA Statutes, the NOFA, and this Agreement.

F. The Contractor further agrees to retain all records for a period of five years after the end of the term of this Agreement:
1) If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues, which arise from it. 2) The Contractor also agrees to include in any contract that it enters in an amount exceeding $10,000, the Department’s right to audit the contractor’s records and interview their employees. The Contractor shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Code Section 10115.10.

G. The determination by the Department of the eligibility of any expenditure shall be final. If the eligibility of any expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and the Department shall determine the reimbursement method for the amount disallowed.

H. The Contractor shall retain all books and records relevant to this Agreement for a minimum of five years after the end of the term of this Agreement. Records relating to any and all audits or litigation relevant to this Agreement shall be retained for five years after the conclusion or resolution of the matter.

I. Subcontractors employed by the Grantee and paid with moneys under the terms of this Standard Agreement shall be responsible for maintaining accounting records as specified above. The Grantee shall monitor and enforce subcontracts accordingly.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

10. Breach and Remedies of Non-Performance
A. The Department may monitor expenditures and activities of an applicant, as the Department deems necessary, to ensure compliance with Program requirements.

B. Any dispute concerning a question of fact arising under this Standard Agreement that is not disposed of by agreement shall be decided by the Department’s Housing Policy Development Manager, or the Manager’s designee, who may consider any written or verbal evidence submitted by the Grantee. The decision of the Department’s Housing Policy Development Manager or Designee shall be the Department’s final decision regarding the dispute.

C. Neither the pendency of a dispute nor its consideration by the Department will excuse the Grantee from full and timely performance in accordance with the terms of this Standard Agreement.

D. In the event that it is determined, at the sole discretion of the Department, that the Grantee is not meeting the terms and conditions of the Standard Agreement, immediately upon receiving a written notice from the Department to stop work, the Grantee shall cease all work under the Standard Agreement. The Department has the sole discretion to determine that the Grantee meets the terms and conditions after a stop work order, and to deliver a written notice to the Grantee to resume work under the Standard Agreement.

E. Both the Grantee and the Department have the right to terminate the Standard Agreement at any time upon 30 days written notice. The notice shall specify the reason for early termination and may permit the Grantee or the Department to rectify any deficiency(ies) prior to the termination date. The Grantee will submit any requested documents to the Department within 30 days of the early termination notice.

F. At any time, if the Department finds the applicant falsely proposed information in the application or as part of the application review, including documentation related to incentive payments (e.g., affordability, enhancements), the Department may require the repayment of funds or decline reimbursement.

G. The Department may, as it deems appropriate or necessary, require the repayment of funds from a grantee, or pursue any other remedies available to it by law for failure to comply with Program requirements (Health and Safety Code section 50515.04(e).

H. The following shall constitute a breach of this Agreement:

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
1) Grantee’s failure to comply with any of the terms and conditions of this Agreement.
2) Use of, or permitting the use of, grant funds provided under this Agreement for any ineligible costs or for any activity not approved under this Agreement.
3) Any failure to comply with the deadlines set forth in this Agreement unless approved by the Program Manager.

I. In addition to any other remedies that may be available to the Department in law or equity for breach of this Agreement, the Department may at its discretion, exercise the following remedies:
1) Disqualify the Grantee from applying for future Program Funds or other Department administered grant programs;
2) Revoke existing PIP award(s) to the Grantee;
3) Decline reimbursement of funds;
4) Require the return of unexpended Program funds disbursed under this Agreement;
5) Require repayment of Program funds disbursed and expended under this Agreement;
6) Require the immediate return to the Department of all funds derived from the use of Program funds including, but not limited to recaptured funds and returned funds;
7) Seek, in a court of competent jurisdiction, an order for specific performance of the obligation defaulted upon, or the appointment of a receiver to complete the obligations in accordance with the PIP requirements; and
8) Other remedies available at law, or by and through this Agreement.

J. All remedies available to the Department are cumulative and not exclusive.

K. The Department may give written notice to the Grantee to cure the breach or violation within a period of not less than fifteen (15) days.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

11. Termination
A. The Department may terminate this Agreement at any time for cause by giving a minimum of thirty days’ notice of termination, in writing, to the Grantee. Cause shall consist of, violations of any terms and/or special conditions of this Agreement, the PIP Statutes, Guidelines or NOFA. Upon termination of this Agreement, unless otherwise approved in writing by the Department, any unexpended funds received by the Grantee shall be returned to the Department within thirty days of the notice of termination.

B. This Agreement is subject to any additional restrictions, limitations or conditions, or statute, regulations or any other laws, whether federal or those of the State of California, or of any agency, department, or any political subdivision of the federal or the State of California governments, which may affect the provisions, terms or funding of this Agreement in any manner.

C. The Department has the option to terminate this Agreement under the thirty-day cancellation clause or to amend this Agreement to reflect any reduction of funds.

12. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of the Department to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Grantee of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the Department to enforce these provisions.

13. Relocation
Grantee shall comply with all requirements of applicable California relocation law (Gov.

Code, § 7260 et seq. and the regulations promulgated thereunder at Cal. Code Regulations, Title. 25, § 6000 et seq.). Any relocation plan for the Development shall be subject to the review and approval by the State.

14. Relationship of Parties
It is expressly understood that this Standard Agreement is an agreement executed by and between two independent governmental entities and is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship whatsoever other than that of an independent party.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

15. Third-Party Contracts
A. All state-government funded procurements must be conducted using a fair and competitive procurement process. The Grantee may use its own procurement procedures as long as the procedures comply with all City/County laws, rules and ordinances governing procurement, and all applicable provisions of California state law.

B. Any contract entered into as a result of this Agreement shall contain all the provisions stipulated in the Agreement to be applicable to the Grantee’s subrecipients, contractors, and subcontractors. Copies of all agreements with subrecipients, contracts, and subcontractors must be submitted to the Department’s program manager upon request.

C. The Department does not have a contractual relationship with the Grantee’s subrecipients, contractors, or subcontractors, and the Grantee shall be fully responsible for all work performed by its sub-recipients, contractors, or subcontractors.

D. In the event the Grantee is partnering with another jurisdiction or forming a collaborative effort between the Grantee and other jurisdictions who are grantees of the PIP, the Grantee acknowledges that each partner and/or all entities forming the SB 2 PIP collaborative are in mutual written agreement with each other but are contractually bound to the Department under separate, enforceable contracts.

E. In the event the Grantee is partnering with another jurisdiction or forming a collaborative effort with other entities that are not grantees of the Prohousing Incentive Program, the Department shall defer to the provisions as noted in subsections 8(B) and 8(C) of this Section.

F. The Grantee agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E. These conditions shall be met to the satisfaction of the Department prior to disbursement of funds. The Grantee shall ensure that all Subrecipients are made aware of and agree to comply with all conditions of this Agreement and the applicable State requirements governing the use of Grant funds. The Grantee shall ensure that all Subrecipients are qualified to do business and in good standing with the California Secretary of State and the California Franchise Tax Board. Failure to comply with these conditions may result in cancellation of this Agreement.

City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

16. Compliance with State and Federal Laws, Rules, Guidelines and Regulations A. The Grantee agrees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the grant, the Grantee, its contractors or subcontractors, and any other grant activity.

B. During the performance of this Agreement, the Grantee assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, ancestry, national origin, sex, gender, gender identity, gender expression, genetic information, age, disability, handicap, familial status, religion, or belief, under any program or activity funded by this contract, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 USC 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975 and all implementing regulations.

C. The Grantee shall include the nondiscrimination and compliance provisions of this clause in all agreements with its sub-recipients, contractors, and subcontractors, and shall include a requirement in all agreements with all of same that each of them in turn include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts they enter into to perform work under the Prohousing Incentive Program.

D. The Grantee shall, in the course of performing project work, fully comply with the applicable provisions of the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et seq.) E. The Grantee shall adopt and implement affirmative processes and procedures that provide information, outreach and promotion of opportunities in the Prohousing Incentive Program project to encourage participation of all persons regardless of race, color, national origin, sex, religion, familial status, or disability.

This includes, but is not limited to, a minority outreach program to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, as required by 24 CFR 92.351.

17. Litigation
City of Crescent City
23-PIP-18478

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of the Department, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Grantee shall notify the Department immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or the Department, and the Grantee shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of the Department.

18. Special Conditions
The State reserves the right to add any special conditions to this Agreement it deems necessary to assure that the policy and goals of the Program are achieved.

City of Crescent City
23-PIP-18478

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

PROGRAM-SPECIFIC PROVISIONS AND SPECIAL CONDITIONS

1. Program-specific Provisions
The following are project-specific terms and conditions and shall inform the references made to project-specific information not contained in the Standard Agreement.

2. Budget Detail:

Grantee has been awarded the following grant activity amounts: $650,000 Estimated allocation may not exceed: $650,000
Payees: City of Crescent City
The authorized Payee(s) is/are specified below:

Name: City of Crescent City Amount:$650,000

3. Consistency with Housing Element Programs:

Provide a description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.

The City’s plan to use Prohousing Incentive Program funds to increase the amount of affordable housing and assist potential applicants with the new construction of affordable housing is found in more than 10 of the 21 key programs in the City’s 6th Cycle Certified Housing Element. In particular, Implementation Program P-4 requires the City to promote the rehabilitation of existing housing stock, and Implementation Programs P-1, P-3, P-7, P-10 and P-17 list steps the City will be taking to encourage the use of private-initiated and/or publiclyfunded programs to provide housing for low- and moderate-income families, and to facilitate the housing production and affordability goals set forth in the RHNA requirements of the 6th Cycle Housing Element Cycle (2022-2030). The City will offer PIP funds to assist developers in building units that will meet the local RHNA goals. The City of Crescent City operates numerous programs aimed at maintaining and expanding affordable housing opportunities in the community. The City’s Housing Authority was established in 1965 with a goal to provide decent, safe, and sanitary housing in Crescent City and surrounding areas of the County.

City of Crescent City
23-PIP-18478

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
Project Timeline, Budget, and Statement of Work (Plan):

PROJECT TIMELINE AND BUDGET AND STATEMENT OF WORK
Objective
Responsible
Party Est. Cost Begin End Deliverable Notes
OBJECTIVE: The
predevelopment,
development,
acquisition,
rehab and
preservation of
multifamily,
residential livework, rental
housing that is
affordable to
extremely low-,
very low-, low-,
or moderateincome
households,
including
necessary
operating
subsidies.

City of
Crescent City
$650,000 11/18/24 02/28/26 The
predevelopment
of at least four
affordable
housing units.

SUBTASK:

Execute grant
agreement with
State and ensure
that all
obligations are
being met
throughout the
duration of the
project. Meet with
staff and attend
any necessary
webinars to learn
the required
reporting process.

City $21,500 7/8/24 6/30/26 Fully executed
standard
agreement and
all required
reporting
materials.

SUBTASK:

Release RFP
City $1,000 10/2/24 10/31/24 Proof of
publication
SUBTASK:

Evaluate
proposals,
interview
developers if
necessary
City $3,000 11/4/24 11/6/24 Proposals,
scoring sheets
City of Crescent City
23-PIP-18478

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024
SUBTASK: Draft
contract and
award developer
City $2,000 11/7/24 11/18/24 Fully executed
contract
SUBTASK:
predevelopment
activities.

Developer $620,000 11/18/24 2/28/26 The
predevelopment
of least four
affordable
housing unit.

SUBTASK:

Complete Funds
Request #2
City $500 4/15/25 4/30/25 Funds Request
SUBTASK:

Complete Funds
Request #3
City $500 9/15/25 9/30/25 Funds Request
SUBTASK:

Complete Funds
Request #4
City $500 10/15/25 10/31/25 Funds Request
SUBTASK:

Complete Funds
Request #5
City $500 1/15/26 1/30/26 Funds Request
SUBTASK:

Complete Funds
Request #6
City $500 3/15/26 3/31/26 Funds Request
Total
Estimated
Cost: 650,000
City of Crescent City
23-PIP-18478

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 10/15/2024

4. Special Terms and Conditions
The following Special Conditions are applicable to this Standard Agreement:

None.

Exhibit B-2: Prohousing Incentive Program Guidelines
[see attached]
Prohousing Incentive Program
Guidelines
State of California
Governor Gavin Newsom
Tomiquia Moss, Secretary
Business, Consumer Services and Housing Agency
Gustavo Velasquez, Director
California Department of Housing and Community
Development
Megan Kirkeby, Deputy Director
Division of Housing Policy Development
651 Bannon Street, Suite 400
Sacramento, CA 95811
Website: https://www.hcd.ca.gov/grants-and-funding/programs-active/prohousing-incentive-program Email: [email protected]
August 2024
Contents
Section 100: Introduction .........................................................................................................0 Section 101: Scope and Authority................................................................................................... 0 Section 200: Eligibility..............................................................................................................1 Section 201: Eligible Applicants ...................................................................................................... 1 Section 202: Threshold Requirements........................................................................................... 1 Section 300: Application Requirements.................................................................................. 2 Section 301: Application Content.................................................................................................... 2 Section 302: Application Submittal................................................................................................. 3 Section 400: Application Review .............................................................................................3 Section 401: Application Process.................................................................................................... 3 Section 402: Base Award and Bonus Award Calculation ......................................................... 4 Section 403: Scoring – Tie Breaker................................................................................................. 4 Section 404: Geographic Categories.............................................................................................. 4 Section 500: Eligible Award Calculation ................................................................................. 5 Section 600: Uses of Funds .....................................................................................................6 Section 601: Eligible Uses................................................................................................................. 6 Section 700: Administration.....................................................................................................7 Section 701: Fiscal Administration ................................................................................................. 7 Section 702: Accounting Records, Audits, Remedies of Non-performance, and Reporting................................................................................................................................................ 9 Section 800: Right to Modify or Suspend and Final Decision-making................................13 Attachment A: Enabling Legislation......................................................................................14 Attachment B: Required Resolution Template ....................................................................... 0 Attachment C: Definitions ........................................................................................................0 Prohousing Incentive Program
Section 100: Introduction
The California Department of Housing and Community Development (Department/HCD) is pleased to release program guidelines (Guidelines) for funding through the Prohousing Incentive Program (Program). The Prohousing Incentive Program is designed to encourage cities and counties to obtain Prohousing Designation.

The Program is funded through Chapter 364, Statutes of 2017 (SB 2, Atkins), which established the Building Homes and Jobs Trust Fund (Fund). The Fund utilizes real estate transaction fees collected at a county level to establish a permanent source of funding. Five percent of annual collections are deposited in a fund to be used for an incentive program.

The Program awards funds based on the Eligible Applicant’s Prohousing Designation Program Score (as codified in the California Code of Regulations Title 25 Housing and Community Development, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6608, Consecutive Prohousing Designation Program). This round of program funding provides awards for Eligible Applicants to use towards planning and implementation activities related to housing and community development. The content and structure of future rounds of Program funding is subject to change at the Department’s sole discretion.

Section 101: Scope and Authority
These Guidelines are authorized pursuant to Chapter 2.5 of Health and Safety Code (Sections 50470 to 50475). The Guidelines implement, interpret, and make specific provisions for purposes of implementing an incentive program pursuant to Health and Safety Code section 50470, subdivision (b)(2)(C)(i), (hereinafter “Prohousing Incentive Program” or “PIP”).

The Guidelines provide the Department’s plan for the expenditure of PIP funds and the administration of the Program. As such, these Guidelines establish terms, conditions, forms, procedures, and other mechanisms as the Department deems necessary to exercise the powers and perform the duties conferred by Chapter 2.5.

The matters set forth herein are regulatory mandates, and are adopted in accordance with the authorities set forth below:

Section 50470 (d) of the Health and Safety Code states “In consultation with stakeholders, the department may adopt guidelines to implement this section, including to determine allocation methodologies. Any guideline, rule, policy, or standard of general application employed by the department in implementing this chapter shall not be subject to the requirements of the Administrative Procedures Act.” 1 These guidelines are mandated and have the dignity of statutes. (Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999) [stating "“Quasi-legislative regulations … have the dignity of statutes … [and]… delegation of legislative authority includes the power to elaborate the meaning of key statutory terms…”].

Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999) The Department reserves the right, at its sole discretion, to suspend or amend the provisions of these Guidelines, including, but not limited to, grant award amounts.

Section 200: Eligibility
Section 201: Eligible Applicants
(A) Eligible Applicants are limited to cities, counties, and cities and counties. (B) Only Eligible Applicants may submit an application. (C)Eligible Applicants may partner through legally binding agreements with other forms of governments or entities. This includes, but is not limited to, partnerships with other localities, regional governments, housing authorities, school districts, special districts, community-based organizations, Tribal Entities or any duly constituted governing body of an Indian Reservation or Rancheria. (D)Eligible Applicants in partnerships may determine the amount of incentive payments between Eligible Applicants participating in the partnership in consultation with the Department.
(E) Eligible Applicants forming partnerships must submit separate, completed, and signed application packages, including resolutions and a copy of the signed agreement between partners to the Department in order to be awarded funds.

Section 202: Threshold Requirements
Eligible Applicants must meet all of the following threshold requirements for participation in the Program:
(A) An adopted housing element in substantial compliance, as determined by the Department, pursuant to Housing Element Law (Article 10.6 of Gov. Code) in accordance with Government Code section 65585, subdivision (h).

1. Applicants not meeting housing element requirements may be considered to meet this threshold requirement at the discretion of the Department on 2 a case-by-case basis. Criteria for consideration include but are not limited to significant progress in meeting housing element requirements (e.g., a draft found to meet statute, rezoning near completion), proposing activities to meet housing element requirements (e.g., rezoning to accommodate housing needs pursuant to Gov. Code Section 65583(c)(1)) and adoption of a compliant element prior to the award of funds.
(B) Housing Element Annual Progress Report submittal pursuant to Government Code Section 65400 for the current or prior year, as applicable. (C)Prohousing Designation: A completed Prohousing Designation application (per the regulations codified in the California Code of Regulations Title 25 Housing and Community Development, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6608, Consecutive Prohousing Designation Program), with an authorizing resolution, must be submitted prior to or in conjunction with the applicant’s PIP application. PIP awards cannot be made until a Prohousing Designation is obtained, as determined by the Department. (D)A complete application as determined by the Department. (E) A resolution authorizing submittal of the application to the Program that materially comports with the Program’s requirements and is legally sufficient as determined in the Department’s reasonable discretion, including an authorized representative. See Attachment B for required resolution format. (F) Compliance with state and federal housing laws as determined by the sole discretion of HCD.
(G)Demonstration of meeting threshold criteria shall be determined by the Department in its sole and absolute discretion. No documentation of meeting threshold requirements is required in the application unless requested by the Department.

Section 300: Application Requirements
Section 301: Application Content
(A) Eligible Applicants may request an allocation of funds by submitting a complete application to the Department.
(B) Application must utilize the forms and manner prescribed in the Department’s application.
3 (C)The application can be found on the Department’s website at https://www.hcd.ca.gov/grants-and-funding/programs-active/prohousingincentive-program. (D)Eligible Applicants must submit a Government Agency Taxpayer Identification Form for an application to be considered complete.
(E) The Department may request additional information and documentation as appropriate.
(F) The Department may consult with and gather relevant information from any individual, entity, or public agency.

Section 302: Application Submittal
(A) An applicant must submit a completed, signed original application in electronic form.
(B) The Department encourages early applications and will accept applications up to the date and time noted on the cover letter of the Notice of Funding Availability (NOFA).
(C)All applications must be submitted by email to: [email protected].

Section 400: Application Review
Section 401: Application Process
(A) Applications will be reviewed for completeness, eligibility, and for meeting threshold requirements.
(B) Eligible Applicants will have until the date specified in the NOFA to obtain Prohousing Designation. After the specified date, HCD will rank Eligible Applicants that met threshold requirements according to their Prohousing Designation Score, as determined by the Department.
(C)Ranked applications will be sorted by geographic category, as described in Section 404 of these Guidelines.
(D)Priority will be given to Eligible Applicants that have not received PIP funds in prior funding rounds. Eligible Applicants awarded in prior funding rounds will only be eligible to receive an award once all previously unfunded Eligible Applicants receive an award.
4 Section 402: Base Award and Bonus Award Calculation
(A) Eligible Applicants will receive a base award according to population size (see Section 500). In addition, Eligible Applicants may receive a bonus award up to $500,000.
(B) For the purpose of calculating the bonus award, an Eligible Applicant’s Prohousing Designation Score will be multiplied by 10,000. For example, an Eligible Applicant with a Prohousing Designation Score of 35 points will be eligible to receive up to a $350,000 bonus award in addition to the base award.

The bonus award amount shall not exceed $500,000.

Section 403: Scoring – Tie Breaker
(A) Eligible Applicants that submit complete applications that meet threshold requirements will be awarded in order of rank and priority, as described in Section 401(D), until funding is depleted.
(B) In the event of a tie (i.e., two or more Eligible Applicants have the same Prohousing Designation Score), the Eligible Applicant with the smaller population size will receive funding first.

Section 404: Geographic Categories
(A) Ranked applications will be considered for awards according to six geographic categories, as follows:

1. Southern California: Imperial, Los Angeles, Orange, Riverside, San Bernardino, Ventura, and San Diego

2. Bay Area: Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, Sonoma, San Francisco

3. San Joaquin Valley: Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, Tulare

4. Sacramento Area: Amador, El Dorado, Placer, Sacramento, Sutter, Yolo, Yuba

5. Central Coast: Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz

6. North State and Sierra Nevada: Alpine, Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Inyo, Lake, Lassen, Mariposa, Mendocino, Modoc, Mono, Nevada, Plumas, Shasta, Sierra, Siskiyou, Tehama, Trinity, Tuolumne
5 (B) Funds are made available to each geographic category based upon the percentage of 2030 population projections, as determined by the Department of Finance (see the NOFA).
(C)The total proportion of available funds in geographic categories will not exceed 75 percent of the total amount of the NOFA.
(D) Awards will be funded from each geographic category’s total available funding amount until the funds for that category are depleted. If Eligible Applicants’ awards exceed the funding available to a geographic category, Eligible Applicants may qualify to fulfill their eligible award from the 25 percent residual set-aside in ranking order.

1. In the event of funds being depleted such that a partial award is indicated, the residual set-aside may be utilized to enhance the award at the discretion of the Department.
(E) If both an Eligible Applicant’s geographic category and the residual set-aside have been depleted, that Eligible Applicant may be eligible for remaining funds at the sole discretion of the Department. Remaining funds will come from unutilized money from geographic categories only after Eligible Applicants located in those geographic categories have been awarded.
(F) When all funds have been depleted, the final Eligible Applicant in the ranking will only be eligible for the award amount that remains in the coffer. Eligible Applicants in this position may opt to pull their PIP application until additional funds are made available to fulfill their eligible award amount in potential future funding rounds.
(G)The Department reserves discretion to alter funding amounts and the distribution methodology to advance Program goals and achieve an equitable outcome.

Section 500: Eligible Award Calculation
(A) This program will make funding available to jurisdictions as Prohousing Incentive grants as determined by the NOFA.
(B) Maximum total award amounts will be no greater than $2 million per Eligible Applicant. Total potential award amounts are determined by adding an Eligible Applicant’s base award amount with an Eligible Applicant’s bonus award amount, as established by the criteria described in Section 402 of these Guidelines. 6 (C)Base award amounts are based on population estimates as of January 1 of the NOFA year1. See the NOFA for the maximum base award amount that a jurisdiction may receive pursuant to this subdivision2. (D)Eligible Applicants in partnerships with other cities or counties, as allowed by section 201(C) of these Guidelines, may qualify for up to the sum of individual Eligible Applicant base award amounts. For example, two jurisdictions between 50,000 and 99,999 people could submit a proposal for up to $1 million in base awards.

Section 600: Uses of Funds
Section 601: Eligible Uses
Eligible Applicants must use award funds towards planning or implementation activities related to housing and community development limited to activities that conform with eligible uses pursuant to Health and Safety Code section 50470(b)(2)(D):

1. The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-, very low-, low-, and moderate-income households, including necessary operating subsidies.

2. Affordable rental and ownership housing that meets the needs of a growing workforce earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas.

3. Matching portions of funds placed into local or regional housing trust funds.

4. Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the Health and Safety Code.

5. Capitalized reserves for services connected to the creation of new permanent supportive housing, including, but not limited to, developments funded through the Veterans Housing and Homelessness Prevention Bond Act of 2014.
1 Population estimates are based on the Department of Finance E-1 report:
https://dof.ca.gov/Forecasting/Demographics/estimates-e1/. 2 Maximum and minimum award amounts may be adjusted by the Department based on demand for the Program.
7 6. Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.

7. Accessibility modifications.

8. Efforts to acquire and rehabilitate foreclosed or vacant homes.

9. Homeownership opportunities, including, but not limited to, down payment assistance.

10.Fiscal incentives or matching funds to local agencies that approve new housing for extremely low, very low, low-, and moderate-income households.

Section 700: Administration
Section 701: Fiscal Administration
(A) Grant Execution and Term

1. The Department will notify the grantee if they have been selected for a grant award:
i. After the Standard Agreement has been drawn, the grantee will be provided instructions for signing all required
documents. The grantee must submit all supporting materials and a signed Standard Agreement within the timeline provided in the instructions, or risk forfeiting the grant award; ii. The grant term begins on the day the Department and the grantee have fully executed the Standard Agreement. The Department will notify the grantee and partners when work may proceed under the agreement. However, eligible activities that are approved by the Department may be retroactively reimbursed to the date of the NOFA; and
iii. The end of the grant term will be determined by the state based on the availability of grant funds and the administrative requirements for liquidation.
(B) Payment and Accounting of Grant Funds

1. Grant funds cannot be reimbursed until the Standard Agreement has been fully executed.
8 2. The grantee will be responsible for compiling and submitting all invoices and reporting documents. Invoices must be accompanied by reporting materials where appropriate. Invoices without the appropriate reporting materials will not be paid. Failure to provide requested documentation to HCD could result in exclusion from consideration for grants in future program years.

3. The grantee will submit documentation to the Department detailing actual costs incurred, which must be based on clear and completed objectives and deliverables as outlined in the PIP application, Exhibit E of the Standard Agreement, and any other supplemental forms prescribed by the Department.

4. Supporting documentation may include, but is not limited to, receipts, progress payments, subcontractor invoices, timecards or any other documentation as deemed necessary by the Department to support the reimbursement to the grantee for expenses in accordance with the grantee’s PIP application and these PIP Guidelines.

5. The grantee must bill the state based on clear deliverables outlined in the Standard Agreement or budget timeline. Only approved and eligible costs incurred for work after the NOFA date, and completed and processed prior to the expenditure deadline, will be reimbursable. Approved and eligible costs incurred prior to the NOFA date are ineligible.

6. Work must be completed prior to requesting reimbursement, unless otherwise approved by the Department.

7. Grant fund payment will be made on a reimbursement basis. Project invoices will be submitted to the Department by the grantee on a quarterly basis or, if earlier, upon completion of deliverables.

8. In unique and/or unusual circumstances, the Department may consider alternative arrangements (e.g., disbursements in advance of activity initiation) to reimbursement and payment methods.

Unusual circumstances include but are not limited to feasibility, unavailable funds or lack of resources and substantial progress in expenditure.

9. The Department recognizes that budgeted deliverable amounts are based upon estimates. Grantees may request, in writing, a budget adjustment across deliverables subject to written approval by the Department, as long as the total budget does not exceed the maximum amount awarded to the grantee.
9 10.The Department may withhold grant funds until grant terms have been fulfilled.

11. The Department may withhold eligible program grants in future program years until terms of the Standard Agreement have been fulfilled to the satisfaction of the Department.

12.Each recipient of funds under the Program shall expend those funds no later than June 30, 2026. Final invoices shall be submitted to the Department three months prior to the expenditure deadline.

Section 702: Accounting Records, Audits, Remedies of Non-performance, and Reporting
(A) Accounting Records

1. The contractor is responsible for maintaining records which fully disclose the activities funded by the grant. Adequate documentation of each transaction shall be maintained to permit the determination, through an audit if requested by the state, of the accuracy of the records and the allowability of expenditures charged to grant funds. If the allowability of an expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and the state shall determine the reimbursement method for the amount disallowed. The state’s determination of the allowability of any expense shall be final.

2. The grantee, its staff, contractors, and subcontractors shall establish and maintain an accounting system and reports that properly accumulate incurred project costs by line. The accounting system shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for payment vouchers and invoices.

3. The grantee must establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the scope of work, project timeline and budget. Separate bank accounts are not required.

4. The grantee shall maintain documentation of its normal procurement policy and competitive bid process (including the use of sole source purchasing), and financial records of expenditures incurred during the project in accordance with GAAP.

5. The grantee agrees that the Department or its designee shall have the right to review, obtain, and copy any records and supporting documentation pertaining to the performance of the Standard Agreement. 10 The grantee agrees to provide the Department or its designee with any relevant information requested.

6. The grantee agrees to permit the Department or the Department’s designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with statutes, Program Guidelines, and the Standard Agreement.

7. Subcontractors employed by the grantee and paid with moneys under the terms of the Standard Agreement shall be responsible for maintaining accounting records as specified above. The grantee shall monitor and enforce subcontracts accordingly.
(B) Audits

1. At any time during the term of the Standard Agreement, the Department may perform or cause to be performed a financial audit of all phases of the award. At the Department’s request, the grantee shall provide, at its own expense, a financial audit prepared by a certified public accountant. The State of California has the right to review project documents and conduct audits during and over the project life.

2. The grantee agrees that the Department or the Department’s designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance of the Standard Agreement.

3. If a financial audit is required by the Department, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in Exhibit D, Section 8 of the Standard Agreement.

4. The grantee shall notify the Department of the auditor’s name and address immediately after the selection has been made. The contract for the audit shall allow access by the Department to the independent auditor’s working papers.

5. The grantee is responsible for the completion of audits and all costs of preparing audits.

6. If there are audit findings, the grantee must submit a detailed response acceptable to the Department for each audit finding within 90 days from the date of the audit finding report.
11 7. The grantee agrees to maintain such records for possible audit after the final payment pursuant to Exhibit D, Sections 8 and 9 of the Standard Agreement, unless a longer period of records retention is stipulated.

8. The grantee shall include in any contract that it enters in an amount exceeding $10,000, the Department’s right to audit the contractor’s records and interview their employees.

9. The grantee shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Contracts Code Section 10115.10.

10.The grantee shall retain all books and records relevant to the Standard Agreement for a minimum of five years after the end of the term of the Standard Agreement. Records relating to any and all audits or litigation relevant to the Standard Agreement shall be retained for five years after the conclusion or resolution of the matter.
i. If any litigation, claim, negotiation, audit, monitoring, inspection, or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues which arise from it.
(C)Remedies of Non-performance

1. In the event that it is determined, at the sole discretion of the Department, that the grantee is not meeting the terms and conditions of the Standard Agreement, the grantee shall cease all work under the Standard Agreement immediately upon receiving a written notice from the Department. The Department has the sole discretion to determine that the grantee meets the terms and conditions after a stop work order, and to deliver a written notice to the grantee to resume work under the Standard Agreement.

2. Both the grantee and the Department have the right to terminate the Standard Agreement at any time upon 30 days written notice. The notice shall specify the reason for early termination and may permit the grantee or the Department to rectify any deficiency(ies) prior to the early termination date. The grantee will submit any requested documents to the Department within 30 days of the early termination notice.

3. At any time, if the Department finds the applicant falsely proposed information in the application or as part of the application review, 12 including documentation related to incentive payments (e.g., affordability, enhancements), the Department may require the repayment of funds or decline reimbursement.

4. The Department may, as it deems appropriate or necessary, require the repayment of funds from a grantee, or pursue any other remedies available to it by law for failure to comply with Program requirements (Health and Safety Code section 50515.04(e).
(D)Reporting

1. At any time during the term of the Standard Agreement, the Department may request a performance report that demonstrates satisfaction of all requirements identified in the Standard Agreement with emphasis on eligible activities, eligible uses, ineligible uses, and expenditures, according to timelines and budgets referenced in the Standard Agreement.

2. Grantees shall submit a report, in the form and manner prescribed by the Department, by April 1 of the year following the receipt of funds, and annually thereafter until funds are expended. The annual report shall contain a detailed report which must include, at a minimum:
i. Identification of the eligible activities to which the Grantee committed program funds, and the income levels of households assisted;
ii. Amounts awarded to Subrecipients with the activity(ies) identified; iii. Identification of the eligible activities upon which the contractor expended program funds, and the income levels of households assisted and the affordability level for any units assisted; and iv. Close out report for contracts that were fully expended and in which all activities funded were completed during the fiscal year.

3. The Department may request additional information, as needed.

4. Upon completion of all deliverables within the Standard Agreement and prior to processing final invoicing, the awardee shall submit a closeout report.
13 Section 800: Right to Modify or Suspend and Final Decisionmaking The Department reserves the right, at its sole discretion, to suspend, amend, or modify the provisions of these Guidelines at any time, including, without limitation, the amount of funds available hereunder. If such an action occurs, the Department will notify all interested parties and will post the revisions to the Department’s website. You may subscribe to the Department’s email list here:
http://www.hcd.ca.gov/HCD_SSI/subscribe-form.html.

The Department’s decision to approve or deny an application or request for funding pursuant to the Program, and its determination of the amount of funding to be provided, shall be final.
14 Attachment A: Enabling Legislation
Building Homes and Jobs Act
Chapter 2.5 of the Health and Safety Code (Sections 50470 – 50475) (Chapter 364, Statutes of 2017)
Health and Safety Code 50470.
(a) (1) There is hereby created in the State Treasury the Building Homes and Jobs Trust Fund. All interest or other increments resulting from the investment of moneys in the fund shall be deposited in the fund, notwithstanding Section 16305.7 of the Government Code.
(2) Moneys in the Building Homes and Jobs Trust Fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except to the Surplus Money Investment Fund.
(b) Moneys in the Building Homes and Jobs Trust Fund shall be appropriated either through the annual Budget Act, or as provided in this subdivision, in accordance with the following:
(1) Moneys collected on and after January 1, 2018, and until December 31, 2018, shall, upon appropriation by the Legislature, be allocated as follows:
(A) Fifty percent of deposits into the fund shall be made available for local governments to update planning documents and zoning ordinances in order to streamline housing production, including, but not limited to, general plans, community plans, specific plans, sustainable communities’ strategies, and local coastal programs. Eligible uses also include new environmental analyses that eliminate the need for project-specific review and local process updates that improve and expedite local permitting. (i) Five percent of the funds specified by this subparagraph shall be available for technical assistance to jurisdictions updating specified planning documents. Technical assistance shall be provided by the department and the Governor’s Office of Planning and Research. (ii) The funds to be allocated pursuant to this subparagraph shall be held by the department until a local government submits a request for use. The request shall include a description of the proposed use of the funds in the interest of accelerating housing production. The proposed use of these funds shall be included in the local government’s funding plan and annual reports pursuant to subclauses (II) and (III) of clause (ii) of subparagraph (B) of paragraph (2). Each recipient of funds under the program shall encumber the funds by December 31, 2020, and shall expend those funds no later than December 31, 2023. Any of these funds not allocated by the department within the first two years that those funds are available shall be made available by the department for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).
(B) Fifty percent of deposits into the fund shall be made available to the department to assist persons experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, 15 navigation centers, and the new construction, rehabilitation, and preservation of permanent and transitional rental housing. (C) The department shall ensure geographic equity in the distribution and expenditure of funds allocated pursuant to this paragraph. (2) Moneys collected on and after January 1, 2019, shall be allocated as follows:
(A) Twenty percent of all moneys in the fund shall, upon appropriation by the Legislature, be expended for affordable owner-occupied workforce housing.
(B) (i) Seventy percent of moneys deposited in the fund shall, upon appropriation by the Legislature, be made available to local governments as follows:
(I) Ninety percent of the moneys specified in this
subparagraph shall be allocated based on the formula
specified in Section 5306 of Title 42 of the United States Code, in accordance with the distribution of funds pursuant to that formula for the federal Fiscal Year 2017, except that the portion allocated to nonentitlement areas pursuant to that section shall be distributed through a competitive grant program, administered by the department, as follows:
(ia) The department shall award priority points to a
county that has a population of 200,000 or less within
the unincorporated areas of the county, to a local
government that did not receive an award based on
the formula specified in Section 5306 of Title 42 of the United States Code in 2016, and to a local
government that pledges to use the money awarded
pursuant to a competitive grant under this subclause
to assist persons experiencing or at risk of
homelessness, including, but not limited to, providing
rapid rehousing, rental assistance, navigation centers, and the new construction, rehabilitation, and
preservation of permanent and transitional rental
housing.
(ib) Moneys awarded to a local government pursuant
to the competitive grant program shall be used for the
purposes specified in subparagraph (D).
(II) The remaining 10 percent of the moneys specified in this subparagraph shall be allocated equitably among local
jurisdictions that are nonentitlement areas pursuant to the formula specified in Section 5306 of Title 42 of the United States Code for federal Fiscal Year 2017.
(ii) To receive moneys pursuant to this subparagraph, local governments shall document minimum standards including the following:
(I) Submit a plan to the department detailing the manner in which allocated funds will be used by the local government in a manner consistent with this paragraph and to meet the 16 local government’s unmet share of the regional housing needs allocation.
(II) Have a compliant housing element with the state and submit a current annual report pursuant to Section 65400 of the Government Code.
(III) Submit an annual report to the department that provides ongoing tracking of the uses and expenditures of any
allocated funds.
(IV) Funds may be expended for the uses listed in
subparagraph (D). Two or more local governments that
receive an allocation pursuant to this subparagraph may expend those moneys on a joint project that is an authorized use under subparagraph (D).
(V) Prioritize investments that increase the supply of housing to households that are at or below 60 percent of area
median income, adjusted for household size.
(VI) If a local government does not have a documented plan to expend the moneys allocated to it pursuant to this
subparagraph within five years of that allocation, those moneys shall be exempt from the allocation requirements in this paragraph and shall revert to, and be paid and deposited in, the Housing Rehabilitation Loan Fund established
pursuant to Section 50661 to be used for the Multifamily Housing Program (Chapter 6.7 (commencing with Section
50675)) or for technical assistance for local governments. (VII) A local government may petition the department to return any moneys allocated to it pursuant to this
subparagraph. Any moneys returned pursuant to this clause shall be used for the Multifamily Housing Program (Chapter

6.7 (commencing with Section 50675)).
(C) Thirty percent of moneys deposited in the fund shall be made available to the department for use as follows:
(i) Five percent of the moneys deposited in the fund shall, upon appropriation by the Legislature, be used for state incentive programs, including loans and grants administered by the department. If the department receives insufficient funding applications for incentive programs financed pursuant to this clause, the department shall make those funds available for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).
(ii) (I) Subject to subclause (II), 10 percent of the moneys deposited in the fund shall, upon appropriation by the
Legislature, be used to address affordable homeownership and rental housing opportunities for agricultural workers and their families.
(II) On and after January 1, 2020, housing funded pursuant to this clause shall not be rented, sold, or subleased to an 17 agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable. A person or entity who receives funds made available pursuant to this clause on or after January 1, 2020, and expends any of those funds for the purpose of funding predevelopment of, developing, or operating any housing that is rented, sold, or subleased to an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, and who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable, shall reimburse the department or other state agency that provided those funds, as provided in paragraph (2) of subdivision (b) of Section 50205. This subclause shall not apply to any contract
entered into or any financial assistance provided pursuant to this clause prior to January 1, 2020.
(III) A person or entity who receives funds made available pursuant to this section on and after January 1, 2020, and expends any of those funds for the purpose of funding
predevelopment of, developing, or operating any housing shall submit a declaration to the department declaring the following:
(ia) (Ia) The person or entity is not an agricultural
employer, as defined in Section 1140.4 of the
Labor Code, or its agent, or a farm labor
contractor, as defined in Section 1682 of the
Labor Code, or its agent, who employs at least
one H-2A worker, as defined in Section 50205.
(Ib) The person or entity will not rent, sell, or
sublease any housing funded pursuant to this
chapter to an agricultural employer, as defined
in Section 1140.4 of the Labor Code, or its
agent, or a farm labor contractor, as defined in
Section 1682 of the Labor Code, or its agent,
who employs at least one H-2A worker, as
defined in Section 50205, until the expiration of
the regulatory agreement or affordability
covenant, as applicable.
(ib) The declaration described in sub-subclause (ia)
can be met through the inclusion in a regulatory
agreement or affordability covenant, as applicable,
18 with the department that is signed by the person or
entity receiving funds pursuant to this chapter.
(iii) Fifteen percent of the moneys deposited in the fund shall, notwithstanding any other provision of this section or Section 13340 of the Government Code, be continuously appropriated to the California Housing Finance Agency for the purpose of creating mixed income multifamily residential housing for lower to moderateincome households pursuant to Chapter 6.7 (commencing with Section 51325) of Part 3.
(D) The moneys in the fund allocated to local governments may be expended for the following purposes:
(i) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low, very low, low-, and moderateincome households, including necessary operating subsidies. (ii) Affordable rental and ownership housing that meets the needs of a growing workforce earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas. (iii) Matching portions of funds placed into local or regional housing trust funds.
(iv) Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the Health and Safety Code.
(v) Capitalized reserves for services connected to the creation of new permanent supportive housing, including, but not limited to, developments funded through the Veterans Housing and
Homelessness Prevention Bond Act of 2014.
(vi) Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
(vii) Accessibility modifications.
(viii) Efforts to acquire and rehabilitate foreclosed or vacant homes. (ix) Homeownership opportunities, including, but not limited to, downpayment assistance.
(x) Fiscal incentives or matching funds to local agencies that approve new housing for extremely low, very low, low-, and moderate-income households.
(3) A state or local entity that receives an appropriation or allocation pursuant to this chapter shall use no more than 5 percent of that appropriation or allocation for costs related to the administration of the housing program for which the appropriation or allocation was made.
(c) Both of the following shall be paid and deposited in the fund:
(1) Any moneys appropriated and made available by the Legislature for purposes of the fund.
19 (2) Any other moneys that may be made available to the department for the purposes of the fund from any other source or sources.
(d) In consultation with stakeholders, the department may adopt guidelines to implement this section, including to determine allocation methodologies. Any guideline, rule, policy, or standard of general application employed by the department in implementing this chapter shall not be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

Attachment B: Required Resolution Template
RESOLUTION NO. [insert resolution number]
A RESOLUTION OF THE [INSERT EITHER “CITY COUNCIL” OR “COUNTY BOARD OF
SUPERVISORS”] OF [INSERT THE NAME OF THE CITY OR COUNTY] AUTHORIZING APPLICATION FOR, AND RECEIPT OF, Prohousing Incentive Program funds.

WHEREAS, pursuant to Health and Safety Code 50470 et. Seq, the California Department of Housing and
Community Development (Department) is authorized to issue Guidelines as part of an incentive program (hereinafter referred to by the Department as the Prohousing Incentive Program or “PIP”); and
WHEREAS the [insert either “City Council” or “County Board of Supervisors”] of [insert the
name of the City or County] desires to submit a PIP grant application package (“Application”), on the forms provided by the Department, for approval of grant funding for eligible activities toward planning and implementation activities related to housing and community development as a result of meeting eligibility criteria including but not limited to Prohousing Designation; and
WHEREAS, the Department has issued Guidelines and Application on XXXXXXXXXXXXX in the
amount of $xxxxxxxx for PIP;
Now, therefore, the [insert either “City Council” or “County Board of Supervisors”] of
[insert the name of the city or county] (“Applicant”) resolves as follows:

SECTION 1. The [insert the authorized designee’s TITLE ONLY] is hereby authorized and
directed to submit an Application to the Department in response to the NOFA, and to apply for the PIP grant funds in a total amount not to exceed $__________; SECTION 2. In connection with the PIP grant, if the Application is approved by the Department,
the [insert the authorized designee’s TITLE ONLY] of the [insert the name of the City or
County] is authorized and directed to enter into, execute, and deliver on behalf of the Applicant, a State of California Agreement (Standard Agreement) for the amount of [$ enter the
dollar amount of the Applicant’s request], and any and all other documents required or
deemed necessary or appropriate to evidence and secure the PIP grant, the Applicant’s obligations related thereto, and all amendments thereto; and 1 SECTION 3. The Applicant shall be subject to the terms and conditions as specified in the Guidelines,
and the Standard Agreement provided by the Department after approval. The Application and
any and all accompanying documents are incorporated in full as part of the Standard Agreement.

Any and all activities funded, information provided, and timelines represented in the Application
will be enforceable through the fully executed Standard Agreement. Pursuant to the Guidelines and
in conjunction with the terms of the Standard Agreement, the Applicant hereby agrees to use the
funds for eligible uses and allowable expenditures in the manner presented and specifically
identified in the approved Application.

ADOPTED ON [insert the date of adoption], by the [insert either “City Council” or “County
Board of Supervisors”] of [insert the name of the City or County] by the following vote count:

AYES: NAYS: ABSENT: ABSTAIN:

ATTEST: APPROVED AS TO FORM:
[Signature of Attesting Officer]
___________________________________________APPROVED
[Signature of approval]
Attachment C: Definitions
Capitalized terms shall have the meanings set forth below:

A. “Department” means the California Department of Housing and Community Development.

B. “Designated Program Year” means the designated time period as indicated in the Notice of Funding Availability (“NOFA”) issued by the Department for each funding round.

C. “Eligible Applicant” means a city, county, or city and county that is in compliance with applicable housing laws as described in section 202(F) herein.

D. “Extremely Low-Income Households” has the meaning set forth in Health and Safety Code Section 50106.

E. “Low-Income Households” has the meaning set forth for lower-income households in Health and Safety Code Section 50079.5.

F. “Preserved” means units Preserved at affordable housing costs to lower-income households by acquisition of the units or the purchase of affordability covenants and restrictions as described in paragraph (2) of subdivision (c) of Section 65583.1 of the Government Code, except that the city, county, or city and county may have committed assistance at any time during the projection period.

G. “Program” means the Prohousing Incentive Program implemented by these Guidelines.

H. “Prohousing Designation” means the Eligible Applicant has fulfilled the criteria codified at CCR Title 25 HCD Div. 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6607, consecutive prohousing-regulation-text.pdf (ca.gov).

I. “Prohousing Designation Score” means the number of points allocated to a jurisdiction as part of the Prohousing Designation Program for the purpose of determining whether the jurisdiction receives designation, per the regulations codified in the California Code of Regulations Title 25 Housing and Community Development, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6607, Consecutive Prohousing Designation Program.

J. “Substantially Rehabilitated” means units at imminent risk of loss to the housing stock which are Substantially Rehabilitated and therefore represent a net increase in the community’s affordable housing stock as described in paragraph (2) of subdivision (c) of Section 65583.1 of the Government Code, except that the city, county, or city and county may have committed assistance at any time during the projection period.

K. “Very Low-Income Households” has the meaning set forth in Health and Safety Code Section 5015.

Promissory Note Pg. 1

Exhibit C: Promissory Note

PLHA / PIP LOAN PROMISSORY NOTE
$1,032,371.43 [DATE]
FOR VALUE RECEIVED, COMMUNITY SYSTEM SOLUTIONS, a California nonprofit corporation (the “Maker”), having an address of 7806 Juarez Way, Fair Oaks, CA 95628, promises to pay CITY OF CRESCENT CITY (“Holder”), the principal sum not to exceed One Million Thirty-Two Thousand Three Hundred Seventy-One Dollars and Forty-Three Cents ($1,032,371.43), together with simple interest as detailed herein, pursuant to the terms and conditions set forth below.
§ 1. FUNDS. This Promissory Note (the “Note”) is made in connection with a Loan Agreement entered into by and between Holder and Maker utilizing two awards through the California Department of Housing and Community Development (“HCD”): (1) Permanent Local Housing Allocation (“PLHA”) funds to Holder pursuant to that certain Standard Agreement No. 23-PLHA-18498 between HCD and Holder dated 09/19/2024 (“PLHA Standard Agreement”); (2) Prohousing Incentive Program (“PIP”) funds to the Holder pursuant to that certain Standard Agreement No. 23-PIP-18478 between HCD and Holder dated 12/09/2024 (“PIP Standard Agreement”). Holder makes a loan of $383,099.10 in PLHA funds and $649,272.33 in PIP funds to Maker for the construction of affordable housing that will address the City’s housing needs (the “Housing Project”) on certain real property currently identified as 964 Third Street, Crescent City, California (the “Site”). § 2. SECURITY. Payment of this Note is secured by a Deed of Trust and Assignment of Rents (the “Deed of Trust”) from Maker to Holder to be recorded against the Site. § 3. PAYMENT. Payment on this Note is deferred for (10) years from June 1, 2026.

If the Note is not forgiven by Holder in accordance with § 4 hereof, then simple interest shall begin to accrue at the rate of 3.0% per annum and periodic payments shall commence July 1 st of that same year. Monthly payments of $5,7251.51 per month for 240 months. All payments made hereunder shall be credited first to any accrued but unpaid interest, then to current interest due and owing and lastly to principal. Interest not paid current shall accrue and shall not be compounded. All principal and interest due and payable on June 1, 2046.

Maker may pay any portion of the principal balance at any time without notice and without prepayment penalties or fees.

Any payments due hereunder shall be made in lawful money of the United States to the City of Crescent City, 377 J Street, Crescent City, California 95531. The place of payment may be changed from time to time as Holder may designate in writing.

Promissory Note Pg. 2
§ 4. FORGIVABLE. The Note will be determined to be forgivable if the following criteria are met:
a. The loaned funds were spent on one or more PLHA/PIP Program eligible activities: land acquisition, demolition and site improvements, off-site improvements, architectural fees, engineering fees, permits and development fees, accounting fees, title and recording fees, taxes and assessment, insurance costs, environmental review (including require studies), financing costs (appraisal / market study, performance bond, construction loan interest, lender inspections, lender legal costs, borrower legal costs, soft debt / total construction period interest, bond issuance costs, construction-permanent loan costs, capitalized operation / transition reserve), site and building construction costs, leaseup costs, contingencies and developer fees. b. The loaned funds were spent on a Housing Project that created at least 4 affordable housing units for very low, low, or moderate-income households. The units must be certified for occupancy prior to June 1, 2030.
c. The Maker is in compliance with this Promissory Note, the Deed of Trust and the Affordable Housing Covenant.
§ 5. DEFAULT. Notwithstanding anything to the contrary provided herein, in the event that the Housing Project is in material default under the terms of the Affordable Housing Covenant such that the affordability restrictions are no longer in effect, or if there shall have been an uncured event of default under this Note or the Deed of Trust securing this Note after the passage of applicable notice and cure periods, then the entire unpaid principal of this Note and accrued interest thereon shall be immediately due and payable. § 6. SITE MAINTENANCE. Maker hereby covenants and agrees that it shall maintain, or cause to be maintained, the Site in a manner consistent with the provisions set forth therefor in the Crescent City Municipal Code and shall keep the entire Site reasonably free from any accumulation of debris or waste materials prior to and after construction. If, at any time, Maker fails to maintain the Site, and has either failed to commence to cure such condition or to diligently prosecute to completion the condition or the condition is not corrected after expiration of thirty (30) days from the date of written notice from Holder to Maker, Holder may perform the necessary corrective maintenance, and Maker shall pay such costs as are reasonably incurred for such maintenance. Holder shall have the right to place a lien on the property should Maker not reimburse Holder for such costs within sixty (60) days following Holder's written demand to Maker for reimbursement of such costs.

Maker, on behalf of itself its heirs, successors and assigns, hereby grants to Holder and its officers, employees and agents, an irrevocable license to enter upon the Site to perform such maintenance during normal business hours after receipt of written notice Promissory Note Pg. 3
from Holder as hereinabove described and Maker's failure to cure or remedy such failure within sixty (60) days of such notice. Any such entry shall be made only after reasonable notice to Maker, and Holder shall indemnify and hold Maker harmless from any claims or liabilities pertaining to any such entry by Holder. Failure by Maker to maintain the Site in the condition provided in this Section may, in Holder's reasonable discretion, constitute a default under this Note and the related Deed of Trust.

The foregoing covenants shall remain in effect for the Site for a period of fiftyfive (55) years from the date of the Certificate of Completion is issued, or until all amounts due Holder hereunder are paid in full, whichever is later. § 7. DEFAULT. The occurrence of any of the following shall constitute an event of default under this Note: (i) Maker fails to pay any amount due hereunder within fifteen (15) days of its due date; (ii) Any default by Maker under this Note, the Deed of Trust, the City Loan Agreement, the PLHA Standard Agreement, or the PIP Standard Agreement after the expiration of applicable notice and cure periods; (iii) Any default by Maker under any other document affecting the Housing Project or Site after the expiration of any applicable notice or cure periods provided therein; (iv) except for transfers that are permitted pursuant to Section 2 of that certain Affordable Housing Covenant between Maker and Holder to be entered into concurrently herewith, the sale, transfer or other conveyance of all or any part of the Site or Housing Project, or any interest in it, without Holder's prior written consent, which shall not be unreasonably withheld.
§ 8. DEFAULT – IMMEDIATELY DUE & PAYABLE. Upon the occurrence of any event of default, or at any time thereafter, at the option of Holder hereof and without notice, the entire unpaid principal and interest owing on this Note shall become immediately due and payable. This option may be exercised at any time following any such event, and the acceptance of one or more installments thereafter shall not constitute a waiver of Holder's option. Holder's failure to exercise such option shall not constitute a waiver of such option with respect to any subsequent event. Holder's failure in the exercise of any other right or remedy hereunder or under any agreement which secures the indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of any such right or remedy shall preclude any further exercise thereof.
§ 9. DEFAULT – PENALTY. At all times when Maker is in default hereunder by reason of Maker's failure to pay principal due under this Note or any amounts due under any loan documents securing this Note, the interest rate on the sums as to which Maker is in default (including principal, if Holder has elected to declare it immediately due and payable), shall be the lower of the highest rate then allowed by law or two percent (2%) over the prime interest rate announced by Wells Fargo Bank, N.A., as of the date of the default.

Promissory Note Pg. 4
§ 10. Maker and any endorsers hereof and all others who may become liable for all or any part of this obligation, severally waive presentment for payment, demand and protest and notice of protest, and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment hereof or of any installment hereof, to the release of any party liable for this obligation, and any such extension or release may be made without notice to any of said parties and without any way affecting or discharging this liability. § 11. Maker agrees to pay immediately upon demand all costs and expenses of Holder including reasonable attorneys' fees, (i) if after default this Note be placed in the hands of an attorney or attorneys for collection, (ii) if after a default hereunder or under the Deed of Trust, the Standard Agreement or under any loan document referred to herein Holder finds it necessary or desirable to secure the services or advice of one or more attorneys with regard to collection of this Note against Maker, any guarantor or any other party liable therefore or to the protection of its rights under this Note, the Deed of Trust, the PLHA Standard Agreement, the PIP Standard Agreement or other loan document, or (iii) if Holder seeks to have the Site abandoned by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the enforcement or collection of the Note or prohibiting the enforcement of the Deed of Trust or any other agreement evidencing or securing this Note lifted by any bankruptcy or other court. § 12. If Holder shall be made a party to or shall reasonably intervene in any action or proceeding, whether in court or before any governmental agency, affecting the property or the title thereto or the interest of the Holder under the Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Holder shall be reimbursed by maker immediately upon demand for all costs, charges and attorneys' fees incurred by Holder in any such case, and the same shall be secured by the Deed of Trust as a further charge and lien upon the Site.
§ 13. Payment of this Note is secured solely by the Deed of Trust recorded against the Site and all improvements thereon, without recourse of any kind against Maker or its constituent entities or limited partners.
§ 14. Any notices provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested, at the address stated in this Note or at such other address as either party may designate in written notice. Copies of any notices given under this Note shall be sent as follows:

Promissory Note Pg. 5
To Holder: City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Manager
To Maker: Community System Solutions
7806 Juarez Way
Fair Oaks, CA 95628
Attn: Michael Bahr, CEO
§ 15. This Note shall be binding upon Maker, its successors and assigns. § 16. This Note shall be construed in accordance with and be governed by the laws of the State of California.
§ 17. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

IN WITNESS WHEREOF, the Maker has executed this Note effective as of the date first above written.

COMMUNITY SYSTEM SOLUTIONS
By:

MICHAEL BAHR, CEO
Deed of Trust Pg. 1
Exhibit D: Deed of Trust

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Clerk
TAX STATEMENTS: NO CHANGE
APN 118-120-025-000 Exempt from Recording Fees Per Gov. Code Section 27383 Exempt from SB 2 Fees per Gov. Code § 27388.1(a)(2)(D)

DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, FIXTURE FILING, AND ASSIGNMENT OF RENTS (“Deed of Trust”) is made on this ____ day of ____ 20___ by COMMUNITY SYSTEM SOLUTIONS, a California nonprofit corporation, as trustor (“Borrower”), _______________________ (“Trustee”), for the benefit of CITY OF CRESCENT CITY, a California municipal corporation (“Lender”).

The Borrower, in consideration of the indebtedness recited and the trust created in this Deed of Trust, irrevocably grants and conveys to Trustee, in trust, with power of sale all of its right title and interest in and to that certain real property located in the City of Crescent City, County of Del Norte, State of California, legally described in “Exhibit A” attached hereto and made a part hereof.

Together with all of the improvements now or hereafter erected on said property, and all easements, rights, appurtenances, rents (subject, however, to the rights and authorities given in this Deed of Trust to the Lender to collect and apply such rents), royalties, mineral, oil and gas rights and profits, water, water rights, and water stock, and all fixtures now or hereafter attached to said property, all of which including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property are referred to in this Deed of Trust as the “Property”;
To secure for the benefit of Lender the repayment of the indebtedness evidenced by the Borrower's promissory note dated _________________ (the “Note”) in the principal sum of $1,032,371.43 and the performance of the covenants and agreements of the Borrower contained in this Deed of Trust, the Note, and that certain Affordable Housing Covenant to Deed of Trust Pg. 2
be entered into between Lender and Borrower and recorded in the Official Records of Del Norte County concurrently herewith.

Borrower covenants and agrees as follows:

1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall pay when due the interest and the principal of the indebtedness evidenced by the Note from the sources and pursuant to the terms of the Note.

2. COMPLIANCE WITH SENIOR DEED OF TRUST. Borrower covenants and agrees to comply with the terms and conditions of any senior deeds of trust recorded against the Property (collectively, the “Senior Encumbrances”).

3. CHARGES AND LIENS. Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to the Property which may attain a priority over this Deed of Trust. Borrower shall promptly pay when due all installments or payments required by Lender and comply with all obligations of any deed of trust that is prior to this Deed of Trust.

4. INSURANCE PROCEEDS. Any insurance proceeds received as a result of damage to the Property from fire or other calamity shall be first expended as required by any Senior Encumbrances.

5. PROTECTION OF LENDER'S SECURITY. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects the Lender's interest in the Property, including, but not limited to, default on or foreclosure of a prior deed of trust, eminent domain, insolvency, code enforcement, or arrangement or proceedings involving a bankrupt or decedent, then the Lender at Lender's option, upon notice to the Borrower, may make such appearances, disburse such sums and take such action as is necessary to protect the Lender's interest including, but not limited to, disbursement of reasonable attorney's fees and entry upon the Property to make repairs, but shall have no right of reimbursement.

6. INSPECTION. Lender may make or cause to be made reasonable entries upon and inspections of the Property, provided that the Lender shall give Borrower notice prior to any such inspection specifying reasonable cause therefor related to the Lender's interest in the Property.

7. CONDEMNATION. Subject to the rights of the holder of a prior deed of trust, the proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender.

Deed of Trust Pg. 3
In the event of a total taking of the Property, the proceeds shall be treated as if received from a sale of the Property. The proceeds shall be applied to the sums to be repaid in the amount and manner described in the Senior Encumbrances and the documents evidencing the indebtedness secured thereby. Any part of the proceeds remaining after these amounts have been paid shall be paid to the Borrower. In the event of a partial taking of the Property, unless Borrower and Lender agree in writing, the proceeds shall be treated as if received from a sale of that portion of the Property which is taken in the condemnation. The percentage value of the portion taken, as compared to the full value of the entire Property, shall be determined by dividing the condemnation proceeds by the fair market value of the entire Property just prior to the taking. This percentage value, once determined, shall be used in the following manner to allocate the condemnation proceeds:
a. First, to the payment of any amount owing under the Senior Encumbrances and the documents evidencing the indebtedness secured thereby; b. Second, to payment of the Note;
c. Third, to the Borrower.

8. BORROWER NOT RELEASED. Extension of the time for payment or modification of amortization of the sums secured by this Deed of Trust granted by the Lender to any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in interest. Lender shall not be required to commence proceedings against such successor or refuse to extend time for payment or modification of amortization of the sums secured by this Deed of Trust by reason of any demand made by the original Borrower and Borrower's successors in interest.

9. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by the Lender in exercising any right or remedy hereunder, otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.

10. REMEDIES CUMULATIVE. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or afforded by law or equity, and may be exercised concurrently, independently or successively.

11. SUCCESSORS AND ASSIGNS BOUND; CAPTIONS. The covenants and agreements contained in this Deed of Trust shall bind, and the rights hereunder shall, subject to Section 14 hereof, inure to the benefit of, the respective successors and assigns of Lender and Borrower. The captions and headings of the Sections of this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof.

Deed of Trust Pg. 4

12. NOTICE. Except for any notice required under applicable law to be given in another manner, any notice to Borrower or Lender provided for in this Deed of Trust shall be given at the addresses provided in the Note and may be given by certified mail or reputable overnight delivery service.

13. GOVERNING LAW; SEVERABILITY. This Deed of Trust shall be governed by the laws of the State of California. In the event that any provision or clause of this Deed of Trust or the Note as incorporated herein conflicts with applicable law, such conflict shall not affect other provisions of this Deed of Trust or the Note which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and Note are declared to be severable.

14. TRANSFER OF THE PROPERTY. If all or any of the Property is sold or conveyed by Borrower, then the sums secured by this Deed of Trust shall be immediately due and payable. In the event of such an acceleration, Lender shall send Borrower written notice of the acceleration in accordance with Section 12 hereof. Such notice shall provide a period of not less than 60 days from the date the notice is mailed within which the Borrower may pay the sums due. If the Borrower fails to pay such sums prior to the expiration of such period, Lender may, without further notice or demand on Borrower, invoke any remedies permitted by Section 15 hereof.

15. OTHER ACCELERATION; REMEDIES Upon Borrower's breach of any covenant or agreement of Borrower in this Deed of Trust or the Note (including covenants to pay sums when due---but excluding the covenants to pay, when due, any sums secured by this Deed of Trust by acceleration upon sale or conveyance which is governed by Section 14 above and any sums payable upon the maturity date of the Note), Lender shall mail notice to Borrower as provided in Section 12 hereof specifying: (a) the breach; (b) a date by which such breach must be cured (which must be at least 30 days after the date of the notice); and (c) that failure to cure such breach on or before the date specified in the notice will result in acceleration of the sums secured by this Deed of Trust and sale of the Property. If the breach is not cured on or before the date specified in the notice, the Lender, at its option, may seek remedies under applicable law, including foreclosure. Lender shall be entitled to collect all reasonable costs and expenses incurred in pursuing such remedies, including, but not limited to, reasonable attorneys’ fees.

Subject to the terms and conditions provided herein, if Lender invokes the power of sale, the Lender shall also execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause Property to be sold and shall cause such notice to be recorded in each county in which the Property or some part thereof is located. Lender or Trustee shall mail copies of such notice in a manner prescribed by applicable law. After the lapse of such time as may be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time Deed of Trust Pg. 5
and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may determine. Lender or Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prime facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee and attorneys' fees and costs of title evidence; (b) to all sums secured by this Deed of Trust, as evidenced by the Note; and (c) the excess, if any, to the person or persons legally entitled thereto.

16. BORROWER'S RIGHT TO REINSTATE. Notwithstanding Lender's acceleration of the sums secured by this Deed of Trust, Borrower shall have the right to have any proceedings begun by Lender to enforce covenants of this Deed of Trust relating to sums due and payable by Borrower discontinued at any time prior to five days before the Property is scheduled for sale pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Borrower pays Lender all sums which would be then due under this Deed of Trust, the Note and notes securing Future Advances, if any, had no acceleration occurred; (b) Borrower pays all reasonable expenses incurred by Lender and Trustee in enforcing the covenants and agreements of Borrower contained in this Deed of Trust and in enforcing Lender's and Trustee's remedies as provided in Section 15 hereof, including, but not limited to reasonable attorneys' fees; (c) Borrower takes such actions as Lender may reasonably require to assure that the lien of this Deed of Trust, Lender's interest in the Property, and Borrower's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.

17. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.

As additional security hereunder, subject to the rights of senior lien holders, Borrower hereby assigns to Lender the rents of the Property, provided that Borrower shall, prior to acceleration under Section 14 or 15 hereof (as applicable), have the right to collect such rents as they become due. Upon acceleration under Section 14 or 15 hereof (as applicable) or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver, shall be entitled to enter upon, take possession of, rent and manage the Property and to collect the rents of the Property.

All rents collected by the Lender or by a judicially appointed receiver shall be applied first to payment of the cost of management of the Property and collection of rents, including, but not limited to, receiver's fees, premiums on receiver's bonds and Deed of Trust Pg. 6
reasonable attorneys' fees, and then to the sums secured by this Deed of Trust.

Lender and the receiver shall be liable to account for those rents actually received and expenditures actually incurred.

18. RECONVEYANCE. Upon payment of all sums evidenced by the Note and secured by this Deed of Trust, Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, if any.

19. SUBSTITUTE TRUSTEE. Lender, at Lender's option, may from time to time remove Trustee and appoint a successor trustee to act as Trustee under this Deed of Trust.

Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee in this Deed of Trust and by applicable law.

20. REQUEST FOR NOTICES. Borrower requests that copies of the notice of default and notice of sale be sent to the Borrower's address and to Borrower’s investor limited partners at the address set forth in Section 16 of the Note.

21. STATEMENT OF OBLIGATION. The Lender may collect a fee not to exceed $15.00 for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of the State of California.

22. NO DISCRIMINATION. The Trustor covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Trustor itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.

23. NONDISCRIMINATION CLAUSES. All deeds, leases or contracts made relative to the Property, the improvements thereon or any part thereof, shall contain or be subject to the nondiscrimination clauses set forth in California Health and Safety Code Section 33436.

24. HAZARDOUS SUBSTANCES.
a. As used in this Section, the following terms shall have the following meanings:

Deed of Trust Pg. 7
"Environmental Laws" means all statutes, ordinances, orders, rules, regulations, plans, policies or decrees and the like now or hereafter in effect relating to (A) Hazardous Substance Activity or Hazardous Substances; (B) the generation, use, storage, transportation or disposal of Hazardous Substances, or solid waste; or (C) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health, safety or welfare, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) ("CERCLA"); the Hazardous Material Transportation Act (49 U.S.C.

Section 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.); the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); the Clean Air Act (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.); the Occupational Safety and health Act (29 U.S.C. Section 651 et seq.); the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.); the Porter-Cologne Water Quality Control Act (California Water Code Section 13020 et seq.); the Safe Drinking Water and Toxic Enforcement Act of 1986 (California Health & Safety Code Section 25249.5 et seq.); the Hazardous Substance Account Act (California Health & Safety Code Section 25300 et seq.); the Hazardous Waste Control Act (California Health & Safety Code Section 25100 et seq.); The California Environmental Quality Act (California Public Resources Code Section 2100 et seq.); and the rules, regulations and ordinances of the City or County of San Francisco or any applicable federal, state and local agencies or bureaus, as amended from time to time.
"Foreclosure Transfer" means the transfer of title to all or any part of the Property or the Trust Estate at a foreclosure sale under the Deed of Trust, either pursuant to judicial decree or the power of sale contained in the Deed of Trust, or by deed in lieu of such foreclosure.
"Hazardous Substances" means (A) any chemical, compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws as a "hazardous substance," "hazardous material," "hazardous waste," "extremely hazardous waste," "acutely hazardous waste," "radioactive waste," "infectious waste," "biohazardous waste," "toxic substance," "pollutant," "toxic pollutant," "contaminant" as well as any other formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" or "TCLP toxicity"; (B) petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (C) "hazardous substance" as defined in Section 2782.6(d) of the California Deed of Trust Pg. 8
Civil Code; (D) "waste" as defined in Section 13050(d) of the California Water Code; (E) asbestos in any form; (F) urea formaldehyde foam insulation; (G) polychlorinated biphenyls (PCBs); (H) radon; and (I) any other chemical, material, or substance that, because of its quantity, concentration, or physical or chemical characteristics, exposure to which is limited or regulated for health and safety reasons by any governmental authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment.

Notwithstanding the foregoing, “Hazardous Substances” shall not include any chemical, compound, material, mixture or substance used in the normal course of constructing or operating an apartment complex, so long as such chemical, compound, material, mixture or substance is used in accordance with environmental laws
"Hazardous Substance Activity" means any actual, proposed, or threatened use, storage, holding, existence, location, release (including, without limitation, any spilling, leaking, leaching, pumping, pouring, emitting, emptying, dumping, disposing into the environment, and the continuing migration into or through soil, surface water, groundwater or any body of water or the air), discharge, deposit, placement, generation, processing, construction, treatment, abatement, removal, disposal, disposition, handling, or transportation of any Hazardous Substance from, under, in, into, or on the Property, including without limitation, the movement or migration of any Hazardous Substances from surrounding property, surface water, groundwater or any body of water, or the air under, in, into or onto the Property and any residual Hazardous Substances contamination in, on, or under the Property.
"Losses" means all charges, losses, liabilities, damages (whether actual, consequential, punitive, or otherwise denominated), costs, fees, demands, claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, causes of action, assessments, fines, penalties, costs, and expenses of any kind or character, foreseeable and unforeseeable, liquidated and contingent, proximate and remote, including, without limitation, the following: (A) the reasonable fees and expenses of outside legal counsel; (B) the reasonable fees and expenses of accountants, third-party consultants, and other independent contractors retained by an Beneficiary; (C) costs, including capital, operating and maintenance costs, incurred in connection with any investigation or monitoring of site conditions or any clean-up, remedial, removal or restoration work required or performed by any federal, state or local governmental agency or political subdivision or performed by any non-governmental entity or person that is required by Environmental Laws or administrative ruling or directive because of the presence, suspected presence, release or suspected release of Hazardous Substances in violation of Environmental Laws in the air, soil, surface water or groundwater at the Deed of Trust Pg. 9
Property; (D) any and all diminution in value of the Property, loss of use or damage to the Property, or loss of profits or loss of business opportunity; and (E) reasonable costs and expenses of enforcing this Section. "Environmental Losses" means Losses rising out of or as a result of: (A) the occurrence of any Hazardous Substance Activity; (B) any violation of any applicable Environmental laws relating to the Property or to the ownership, use, occupancy or operation thereof; (C) any investigation, inquiry, order, hearing, action, or other proceeding by or before any governmental agency in connection with any Hazardous Substance Activity; or (D) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which directly or indirectly relates to, arises from or is based on any of the matters described in clauses (A), (B), or (C), or any allegation of any such matters. b. Trustor represents and warrants to Beneficiary that Trustor has conducted as appropriate inquiry and investigation, and, to the best of Trustor's knowledge, based on such inquiry and investigation, no portion of the Property is being used or has ever been used at any previous time, for the disposal, storage, treatment, processing or other handling of Hazardous Substances, nor have any Hazardous Substances migrated onto or from the Property. Neither the Property nor Trustor is in violation of or subject to any existing, pending or threatened investigation by any governmental authority under any Environmental Law. Trustor's intended use of the Property will not result in the disposal or release of any Hazardous Substances on, under, about or to the Property or the migration of any Hazardous Substances from the Property. The foregoing representations and warranties shall be continuing and shall be true and correct for the period from the date hereof to the release of this Deed of Trust (whether by payment of the indebtedness secured hereby or foreclosure or action in lieu thereof), and these representations and warranties shall survive such release. c. Trustor represents and warrants to Beneficiary that Trustor has complied with all recommendations by any engineers retained by Trustor and all requirements of any applicable department of environmental resources, environmental protection agency or similar governmental agency, and there are no recommendations by said engineers or requirements ordered by said agency or any other governmental body for environmental investigation or cleanup with respect to the Property.
d. On and after the date hereof, Trustor shall not: (a) allow any Hazardous Substances to be installed, used, introduced, stored, treated, disposed of, generated, manufactured, discharged, dumped, transported or brought in, upon or over the Property in violation of applicable law; (b) allow any soil or ground water contamination or pollution with any Hazardous Substances on the Property in violation of applicable law; (c) allow any Hazardous Substances to migrate from the Property in violation of applicable law; (d) allow any Hazardous Substances to migrate onto the Property from any adjacent properties in violation of applicable law; or (e) allow or cause the Property to be in violation of, or to Deed of Trust Pg. 10
trigger a duly initiated and prosecuted investigation of the Property by any governmental authority under applicable limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules or timetables contained in any local, state and/or federal laws, regulations, codes, ordinances, plans, administrative or judicial orders, decrees, judgments, notices or demand letters issued, entered, promulgated or approved thereunder relating to the environment, land use, water and air quality and Hazardous Substances ("Environmental Requirements").
e. If the presence of any Hazardous Substances on the Property caused or permitted by Trustor results in any contamination of the Property, Trustor shall promptly take all actions, at its sole expense, as are necessary to return the Property to the condition existing prior to the introduction of any such Hazardous Substances to the Property; provided that Beneficiary's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Property.
f. At any time after the occurrence and during the continuance of any default under this Section, Beneficiary shall have the following rights and remedies, in addition to any other rights and remedies Beneficiary has under this Deed of Trust:
i. As provided in California Code of Civil Procedure Section 564, Beneficiary or its employees, acting by themselves or through a court appointed receiver may do any of the following: (i) enter upon, possess, manage, operate, dispose of, and contract to dispose of the Property or any part thereof; (ii) take custody of all accounts; (iii) negotiate with governmental authorities with respect to the Property's environmental compliance and remedial measures; (iv) take any action necessary to enforce compliance with environmental provisions, including spending Rent Payments to abate any environmental problem; (v) make, terminate, enforce or modify leases of part or all of the Property; (vi) contract for goods and services, hire agents, employees, and counsel, make repairs, alterations, and improvements to the Property necessary in Beneficiary's judgment to protect or enhance the security hereof; and/or (vii) take any and all other actions which may be necessary or desirable to comply with Trustor's obligations hereunder and under the Loan Documents. All sums realized by the receiver or Beneficiary under this subparagraph, less all costs and expenses incurred by either of them under this subparagraph, including attorneys' fees, and less such sums as Beneficiary or the receiver deems appropriate as a reserve to meet future expenses under this subparagraph, shall be applied on any indebtedness secured hereby in such order as Beneficiary shall determine. Neither application of said sums to said indebtedness, nor any other action taken by Beneficiary or the receiver under this subparagraph shall cure or waive any default or notice of default hereunder, or nullify the effect of any such notice of default. Beneficiary, or any employee or agent of Beneficiary, or a receiver Deed of Trust Pg. 11
appointed by a court, may take any action or proceeding hereunder without regard to the adequacy of the security for the indebtedness secured hereunder, the existence of a declaration that the indebtedness secured hereby has been declared immediately due and payable, or the filing of a notice of default.
ii. With or without notice, and without releasing Trustor from any obligation hereunder, to cure any default of Trustor or in connection with any such default, Beneficiary or its agents, acting by themselves or through a courtappointed receiver, may enter upon the Property or any part thereof and perform such acts and things as Beneficiary deems necessary or desirable to inspect, investigate, assess, and protect the security hereof, including of any of Beneficiary's other rights: (i) to obtain a court order to enforce Beneficiary's right to enter and inspect the Property under California Civil Code Section 2929.5 (in respect of which the decision of Beneficiary as to whether there exists a release or threatened release of hazardous substance, as defined therein, onto the Property shall be deemed reasonable and conclusive as between the parties hereto); and (ii) to have a receiver appointed under California Code of Civil Procedure Section 564 to enforce Beneficiary's right to enter and inspect the Property for hazardous substances as defined therein. All costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary or its agents or employees may conduct, including the fees of engineers, laboratories, contractors, consultants, and attorneys, shall be paid by Trustor. All costs and expenses incurred by Trustee and Beneficiary pursuant to this subparagraph (including court costs, consultant fees and attorney fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Note Rate, from the date they are incurred until said sums have been paid. iii. Beneficiary may seek a judgment that Trustor has breached its covenants, representations and/or warranties with respect to the environmental matters set forth above in this Section, by commencing and maintaining an action or actions in any court of competent jurisdiction for breach of contract pursuant to California Code of Civil Procedure Section 736, whether commenced prior to foreclosure of the Property or after foreclosure of the Property, and to seek the recovery of any and all costs, damages, expenses, fees, penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket costs or expenses actually incurred by Beneficiary or advanced by Beneficiary (collectively, the "Environmental Costs") relating to the cleanup, remediation or other response action required by applicable law or which Beneficiary believes necessary to protect the Property, it being conclusively presumed between Beneficiary and Trustor that all such Environmental Costs incurred or advanced by Beneficiary relating to the cleanup, remediation, or other response action respecting the Property were made by Beneficiary Deed of Trust Pg. 12
in good faith. All Environmental Costs incurred by Beneficiary under this subparagraph (including court costs, consultant fees and attorney fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Note Rate, from the date of expenditure until said sums have been paid. Beneficiary shall be entitled to bid, at any sale of the Property held hereunder, the amount of said costs, expenses and interest in addition to the amount of the other obligations hereby secured as a credit bid, the equivalent of cash.
iv. As provided in California Code of Civil Procedure Section 726.5, Beneficiary may waive its lien against the Property or any portion thereof, to the extent such property is found to be environmentally impaired as defined therein, and to exercise any and all rights and remedies of an unsecured creditor against Trustor and all of Trustor's assets and property for the recovery of any deficiency and Environmental Costs, including seeking an attachment order under California Code of Civil Procedure Section 483.010. Beneficiary and Trustor each represents and warrants for itself that it has no actual knowledge of any release of any Hazardous Substance (as defined in Section 726.5) on, to or under the Property. As between Beneficiary and Trustor, for purposes of California Code of Civil Procedure Section 726.5, Trustor shall have the burden of proving that Trustor or any related party (or any affiliate or agent of Trustor or any related party) did not cause or contribute to, and was not in any way negligent in permitting, any release or threatened release of the Hazardous Substance.
v. Trustor acknowledges and agrees that notwithstanding any term or provision contained herein or in the Loan Documents, the Environmental Costs and all judgments and awards entered against Trustor pursuant to Section 24(f)(iv) above shall be exceptions to any nonrecourse or exculpatory provision of the Loan Documents, and Trustor shall be fully and personally liable for the Environmental Costs and such judgments and awards and such liability shall not be limited to the original principal amount of the obligations secured by this Deed of Trust, and Trustor's obligations shall survive the foreclosure, deed in lieu of foreclosure, release, reconveyance, or any other transfer of the Property or this Deed of Trust.
g. Trustor hereby agrees to indemnify, defend and hold harmless Beneficiary from and against any and all Environmental Losses.
[signature page to follow]
Deed of Trust Pg. 13
IN WITNESS THEREOF, Borrower has executed this Deed of Trust on the day and year first above written.

BORROWER:

COMMUNITY SYSTEM SOLUTIONS
By: __________________________
Michael Bahr, CEO
Deed of Trust Pg. 14
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) SS.

COUNTY OF _________________ )
On , before me, , a Notary
Public in and for said State, personally appeared, ,
who proved to me the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal. [SEAL]
Signature of Notary Public
Deed of Trust Pg. 15

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Crescent City, County of Del Norte, State of California, described as follows:

Affordable Housing Covenant Pg. 1
Exhibit E: Affordable Housing Covenant

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Clerk
TAX STATEMENTS: NO CHANGE
APN 118-120-025-000 Exempt from Recording Fees Per Gov. Code Section 27383 Exempt from SB 2 Fees per Gov. Code § 27388.1(a)(2)(D)

AFFORDABLE HOUSING COVENANT
For valuable consideration, the receipt of which is hereby acknowledged, CITY OF CRESCENT CITY ("City"), a California municipal corporation, hereby agrees with COMMUNITY SYSTEM SOLUTIONS, a California nonprofit corporation ("Developer"), with respect to that certain parcel of real property (the "Site") legally described on Exhibit A, that the Site and the residential units to be constructed thereon (the "Housing Project") will be subject to the conditions, restrictions, reservations and rights of City specified below.

This Covenant is entered into in connection with a promissory note executed by Developer in favor of the City in the amount of $1,032,371.43 (the “Note”) in connection with the award of Permanent Local Housing Allocation (“PLHA”) funds and Prohousing Incentive Program (“PIP”) funds from the California Department of Housing and Community Development (“HCD”) to the City and the loan of PLHA/PIP funds from the City to the Developer. The Note is secured by a deed of trust recorded against the Site.

1. USE OF THE SITE. The Developer hereby covenants and agrees, for itself, its lessees, successors and assigns, as follows:

A. Purpose. The City and Developer have executed this Agreement to assure the Site meets the affordability requirements. Developer must create 4 units reserved for moderateincome households (defined as those households earning up to 120% of the area median income adjusted for household size and set annually by HCD) and remains affordable for the longest feasible period, but for not for fewer than fifty-five (55) years from the date of certificate of occupancy. This Agreement is also required by HCD to restrict the rents and occupancy of the Housing Project in accordance with the requirements of the PLHA and PIP programs.

Affordable Housing Covenant Pg. 2
B. Rent and Income Restrictions. Four of the residential units to be developed on the Site (the "Affordable Units") shall be rented to moderate-income households and whose income does not exceed the limits set forth below ("Eligible Households"):
(1) All of the Affordable Units constructed on the Site shall be available to moderate-income households whose income does not exceed 120% of the area median income (adjusted for household size). These Affordable Units shall be available at rents that do not exceed 30% of 120% of the AMI, as adjusted by household size, less a utility allowance.
(2) The applicable income limits and Affordable Rents for Affordable Units, including utility allowances, or as determined by HUD with respect to any subsidy contract of HUD or the Housing Authority of the City on the Project.

It shall be the obligation of Developer to annually obtain from City or any other applicable source the applicable income limits and Affordable Rents, as they may be adjusted from time to time.

C. Tenant Qualification for Rental Units.
(1) Developer agrees to rent the Affordable Units solely to Income Eligible Households, at not more than the applicable Affordable Rent. (2) Developer must take reasonable steps to certify the income level of prospective occupants of an Affordable Unit, at the time of the initial rental, and annually thereafter. Developer may request an income certification from the proposed occupant of the Affordable Unit in one or more of the following methods:
(a) Obtain two (2) most recent paycheck stubs from all proposed occupants;
(b) Obtain a true copy of income tax returns from all proposed occupants for the most recent tax year in which a return was filed; (c) Obtain an income verification certification from the employer of all proposed occupants;
(d) Obtain an income verification certification from the Social Security Administration and/or the California Department of Social Services if any proposed occupants receive assistance from such agencies; or (e) Obtain an alternate form of income verification acceptable to the City Representative or under applicable HUD rules and requirements for any subsidy agreement for the Project.
(3) Developer shall apply the same rental terms and conditions to tenants of Affordable Units as are applied to all other tenants, except as otherwise required to comply with this Agreement (i.e., rent levels, occupancy restrictions and income requirements) and/or government subsidy programs.

Discrimination based on subsidies received by the prospective tenant is prohibited.

D. Changes in Tenant Income.
(1) If the income of a tenant occupying an Affordable Unit decreases below the category for which the tenant originally qualified, the tenant shall continue to Affordable Housing Covenant Pg. 3
have the right to reside in the Affordable Unit, provided the tenant pays the rent and performs his other obligations to Developer.
(2) If the income of a tenant occupying an Affordable Unit increases above the category for which the tenant originally qualified, the tenant may remain in the unit (the “Original Unit”) at the tenant’s new applicable Affordable Rent, as long as the next vacant unit is re-designated for the income category previously applicable to the Original Unit.
(3) Units may be re-designated per Section 1.D(2) of this Agreement by entering into and recording an amendment to this Agreement.
(4) So long as the Developer complies with the procedures set forth in this Section 1.D, Developer shall not be in violation of this Agreement due to a tenant’s income eventually exceeding the income limit for the Affordable Unit occupied by that tenant.

E. Utilization of Affordable Rental Units. All Affordable Units required by this Agreement shall be leased or rented and fully utilized in accordance with this Agreement; no Affordable Unit shall be withdrawn from the market or otherwise held vacant.

F. No Sublease. A tenant occupying an Affordable Unit may not sublet the unit without the written permission of both Developer and City, which may be withheld in its sole and absolute discretion. The City shall not grant permission to lease, rent, or sublet the unit if it finds that the prospective tenant or occupant is not an Income Eligible Household. Any individual who subleases an Affordable Unit in violation of the provisions of this Agreement shall be required to forfeit to City all monetary amounts so obtained.

G. Lease Agreement. The form of lease agreement between Developer or its agent and the tenant of any Affordable Unit shall include provisions providing for the implementation of Section 1.D of this Agreement. The City may request in writing to the Developer the current form of lease agreement utilized by the Developer for determination of compliance with the provisions under this Agreement. If the City has not approved compliance or responded within 10 business days of receipt of the form of lease agreement, the Developer shall submit a written reminder, and if the City does not confirm compliance or respond to such reminder within an additional 10 business days, then the form of lease agreement shall be deemed approved and confirmed.

Notwithstanding anything to the contrary herein, any approval or deemed approval of the lease agreement by the City shall not relieve the Developer of any of its obligations hereunder.

H. Maintenance of Units. Developer shall: (a) maintain and operate all units on the Property so as to provide decent, safe and sanitary housing consistent with federal housing quality standards; (b) make any required repairs or provide any required cleanup; and (c) provide the Affordable Units with the same levels of services and maintenance as are provided to the other dwelling units on the Property.

I. Affordable Unit Compliance Inspection and Certification. The City may inspect the Affordable Units (subject to the rights of tenant) and any documents or records relating Affordable Housing Covenant Pg. 4
thereto, at any reasonable time upon at least 48 hours prior written notice to determine Developer’s compliance with this Agreement. Moreover, upon written request from the City, the Developer agrees to submit an annual report (the “Annual Report”) certifying that all Affordable Units are being leased or rented in compliance with this Agreement no more than once per calendar year period during the term of this Agreement.

J. Reporting Requirements. Annual reports and annual income recertifications must be submitted to the City. The reports, at a minimum, shall include:
(1) The number of persons per unit
(2) Tenant name
(3) Initial occupancy date
(4) Rent paid per month
(5) Gross income per year
(6) Percent of rent paid in relation to income.

Annual income recertifications shall also contain those documents used to certify eligibility. City may, from time to time during the term of this Covenant, request additional or different information and Developer shall promptly supply such information in the reports required hereunder. Developer shall maintain all necessary books and records, including property, personal and financial records, in accordance with requirements prescribed by City with respect to all matters covered by this Covenant. Developer, at such time and in such forms as City may require, shall furnish to City statements, records, reports, data and information pertaining to matters covered by this Covenant. Upon request for examination by City, Developer, at any time during normal business hours, shall make available all of its records with respect to all matters covered by this Covenant. Developer shall permit City to audit, examine and make excerpts or transcripts from these records.

2. NO TRANSFER. The Developer shall not sell, transfer, convey, encumber, assign or lease the whole or any part of the Site without the prior approval of the City and HCD, which shall not be unreasonably withheld. Developer shall request approval by written notice at least ninety (90) days prior to any proposed transfer. This prohibition shall not be deemed to (i) prevent the granting of easements or permits to facilitate the development of the Site, (ii) prohibit or restrict the rental or leasing of units when the construction of the Housing Project is completed, or (iii) prohibit or restrict the grant and exercise of an option and/or right of first refusal to purchase the Site given by Developer to a general partner of Developer in accordance with the Developer’s Partnership Agreement on or around the expiration of the tax credit compliance period which shall not require the prior written approval of Developer, but Developer shall give notice of such transfer to City.

3. MANAGEMENT. During the term of this Covenant, Developer shall promptly notify the City in the event there is any change in the property management company managing the Housing Project. The property management agreement shall name the City as a third-party beneficiary permitting the City the right to enforce the Agreement. Developer shall submit a Affordable Housing Covenant Pg. 5
copy of such agreement to the City, provided the City shall not have the right to approve or disapprove such agreement except to ensure compliance of such agreement with the provisions of this paragraph.

4. NO DISCRIMINATION. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, or genetic information in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Site.

5. NONDISCRIMINATION AND NONSEGREGATION CLAUSES. All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof, shall contain or be subject to substantially the following nondiscrimination and nonsegregation clauses:

All deeds, leases or contracts made relative to the Site, the improvements thereon or any part thereof shall contain or be subject to substantially the following nondiscrimination clauses:
(1) In deeds: (a) "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land."
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens.

Subdivisions (d) of Section 51 and Section 1360 of the Civil Code and Affordable Housing Covenant Pg. 6
subdivision (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).
(2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
(a) "That there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of
subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased."
(b) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,
nothing in paragraph (a) shall be construed to affect Sections

51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivisions (d) of Section 51 and Section 1360 of the Civil Code and
subdivision (n), (o), and (p) of Section 12955 of the
Government Code shall apply to paragraph (a).
(3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises."

6. NO IMPAIRMENT OF LIEN. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Covenant shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument; provided, however, that any successor of Developer to the Site shall be bound by Affordable Housing Covenant Pg. 7
such covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.

7. DURATION. The covenants contained in Section 1 of this Covenant shall be deemed to run with the land and shall remain in effect for not less than fifty-five (55) years following the date the certificate of occupancy is issued for the Housing Project. The covenants against discrimination contained in Sections 4 and 5 of this Covenant shall be deemed to run with the land and shall remain in effect in perpetuity.

8. SUCCESSORS AND ASSIGNS. The covenants contained in this Covenant shall be binding for the benefit of the City and its respective successors and assigns, third party beneficiaries, and any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the City and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the City is or remains an Developer of any land or interest therein to which such covenants relate. The City, and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Covenant shall be for the benefit of and shall be enforceable only by the City, and its respective successors and assigns, third party beneficiaries, and such aforementioned parties.

9. NOTICES. Any notices or reports required by this Agreement shall be deemed received on: (i) the day of delivery if delivered by hand, facsimile or overnight courier service during Consultant’s and City’s regular business hours; or (ii) on the third business day following deposit in the United States mail if delivered by mail, postage prepaid, to the addresses listed below:

To City:

City of Crescent City
377 J Street
Crescent City, CA 95531
Attn: City Manager
To Developer:

Community System Solutions
7806 Juarez Way
Fair Oaks, CA 95628
Attn: Michael Bahr, CEO
The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section.

Affordable Housing Covenant Pg. 8

10. GOVERNING LAW. The laws of the State of California shall govern this Agreement. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Del Norte, State of California or in Federal District Court in the Northern District of California.

11. DEFAULT. Failure or delay by either party to perform any term or provision of this Agreement, which is not cured within thirty (30) days after receipt of notice from the other party, constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with due diligence. The injured party shall give written notice of default to the party in default specifying the default complained of by the injured party.

Except as required to protect against further damages, the injured party may not initiate proceedings against the party in default until thirty (30) days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.

12. REMEDIES. Upon a violation by Developer of its obligations and covenants in this Agreement, after providing the requisite notice and cure period as set forth in Section 11 hereof, City may institute any appropriate legal actions or proceedings necessary and seek any remedies available at law or in equity to ensure compliance with this Agreement, including but not limited to actions for specific performance, injunctive relief or damages. Any provision hereunder providing for a specific remedy shall not be deemed a waiver of any other right or remedy available to the City.

13. ATTORNEY’S FEES. In any action brought to declare the rights granted herein or to enforce or to interpret any of the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorney’s fees in an amount determined by the court.

14. COSTS AND EXPENSES. The Developer shall pay all costs and expenses incurred to comply with its obligations arising from this Agreement and incurred by the City or any of its departments and arising from this Agreement, including the review of any requests for approvals made by the Developer.

15. NON-WAIVER. Failure to exercise any right City may have or be entitled to, in the event of default hereunder shall not constitute a waiver of such right or any other right in the event of a subsequent default.

16. FURTHER ASSURANCES AND RECORDATION. Developer shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form and do such further acts as may be necessary, desirable or proper as City shall from Affordable Housing Covenant Pg. 9
time to time finds necessary or appropriate to effectuate its purpose in entering into this Agreement.

17. ENTIRE AGREEMENT. The text herein and attachments, constitutes the entire agreement between the parties with respect to the matter described herein. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that any other agreement, statement or promise not contained in this Agreement shall not be valid or binding.

18. AMENDMENT OF THIS AGREEMENT. This Agreement may be amended from time to time in whole or in part by mutual consent of the original parties or their successors in interest, in accordance with this Agreement, the Crescent City Municipal Code and California law.

19. TERM OF AGREEMENT. The covenants and restrictions contained in the Agreement shall remain in effect for fifty-five (55) years from the date of Certificate of Occupancy issuance for the Housing Project, including all of the Affordable Units.

20. SEVERABILITY. If any article, section, subsection, term or provision of this Agreement, or the application thereof to any party or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of the article, section, subsection, term or provision of this Agreement, or the application of the same to parties or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each remaining article, section, subsection, term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
[SIGNATURES FOLLOW ON NEXT PAGE]
Affordable Housing Covenant Pg. 10
IN WITNESS WHEREOF, the City and Developer have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, this ____day of ______________ 20_____.

CITY:

CITY OF CRESCENT CITY, a municipal
corporation of the State of California
By:

Eric Wier, City Manager
Approved as to Form:

By:

Martha D. Rice, City Attorney
Affordable Housing Covenant Pg. 11
DEVELOPER:

COMMUNITY SYSTEM SOLUTIONS
By: ______________________________________
Michael Bahr, CEO
Affordable Housing Covenant Pg. 12
STATE OF CALIFORNIA }
COUNTY OF DEL NORTE }
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

On _________________________ before me, ______________________________________, a Notary Public, personally appeared ____________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal. [seal]
__________________________________
Signature
Affordable Housing Covenant Pg. 13
STATE OF CALIFORNIA }
COUNTY OF DEL NORTE }
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

On _________________________ before me, ______________________________________, a Notary Public, personally appeared ____________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal. [seal]
__________________________________
Signature
Affordable Housing Covenant Pg. 14

EXHIBIT A
Legal Description of the Site
Real property in the City of Crescent City, County of Del Norte, State of California, described as follows:

Crystal Alvarez
09/19/2024
City of Crescent City
23-PLHA-18498

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

AUTHORITY, PURPOSE AND SCOPE OF WORK

1. Authority
Pursuant to Part 2 Chapter 2.5 of Division 31 of the Health and Safety Code (commencing with Section 50470) Statutes of 2017 (SB 2, Atkins), which created the Building Homes and Jobs Trust Fund and the Permanent Local Housing Allocation (“PLHA”) Program (“Program”), this Standard Agreement along with all its exhibits (the “Agreement”) is entered under the authority of and in furtherance of the Program.

Pursuant to Health and Safety Code, Section 50470 (b), the California Department of Housing and Community Development (referred to herein as “HCD” or “Department”) has issued a Notice of Funding Availability (the “NOFA”), dated December 29, 2024, to govern administration of the fund and carry out the Program.

2. Purpose
In accordance with the authority cited above, an application was made to the State (the “Application”) for assistance from the Program for the purpose of making funding available to eligible local governments in California for housing related projects and programs that assist in addressing the unmet housing needs of their local communities.

By entering into this Agreement and thereby accepting the award of the PLHA grant funds (the “Grant”), the Contractor (sometimes referred to herein as the “Applicant”) agrees to comply with the terms and conditions of the NOFA, this Agreement, the representations contained in the Application, and the requirements of the authorities cited above.

3. Definitions
Capitalized terms not otherwise defined herein shall have the meaning of the definitions set forth in Health and Safety Code Section 50470 and Section 101 of the Guidelines.

4. Scope of Work
A. The scope of work (“Work”) for this Agreement shall consist of one or more of the following eligible uses:
1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-, very low-, low-, or moderate-income households, including necessary Operating subsidies.

City of Crescent City
23-PLHA-18498

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in highcost areas. ADUs shall be available for a term of no less than thirty days. 3) Matching portions of funds placed into local or regional housing trust funds.
4) Matching portions of funds available through the Low- and ModerateIncome Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.
5) Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing.
6) Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
a) This Activity may include subawards to Administrative Entities as defined in HSC Section 50490(a)(1-3) that were awarded California Emergency Solutions and Housing (CESH) program or Homeless Emergency Aid Program (HEAP) funds for rental assistance to continue assistance to these households.
b) Applicants must provide rapid rehousing, rental assistance, navigation centers, emergency shelter, and transitional housing activities in a manner consistent with the Housing First practices described in 25 CCR, Section 8409, subdivision (b)(1)-(6) and in compliance with WIC Section 8255(b)(8). An Applicant allocated funds for the new construction, rehabilitation, and preservation of Permanent supportive housing shall incorporate the core components of Housing First, as provided in WIC Section 8255, subdivision (b).

City of Crescent City
23-PLHA-18498

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date:10/05/2020
Prep. Date: 07/12/2024
7) Accessibility modifications in Lower-income Owner-occupied housing. 8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments.
9) Homeownership opportunities, including, but not limited to, down payment assistance.
10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more Affordable housing Projects, or matching funds invested by a county in an Affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an Affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low interest deferred loan to the Affordable housing Project.

B. A Local government that receives an allocation shall use no more than five percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in Section 301 are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation.

C. Two or more local governments that receive PLHA allocations may expend those moneys on an eligible jointly funded project as provided in Section 50470 (b)(2)(B)(ii)(IV). An eligible jointly funded project must be an eligible Activity pursuant to Section 301(a) and be located within the boundaries of one of the Local governments.

D. Entitlement Local governments may use the flow of PLHA funds to incentivize private lender loans and to guarantee payments for some or all public agency bond financings for activities consistent with the uses identified in Section 301 “Eligible Activities”. This loan guarantee Activity must be identified and fully explained in the Applicant’s “Plan”.

City of Crescent City
23-PLHA-18498

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

5. Department Contract Coordinator
The Department’s Contract Coordinator for this Agreement is the Division of Financial Assistance, Grant Management Section PLHA Manager or their designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be mailed by first class to the Department Contract Coordinator at the following address:

California Department of Housing and Community Development Attention: Permanent Local Housing Allocation (PLHA)
Grant Management Section, Suite 400
651 Bannon Street, 8th Floor
Sacramento, CA 95811
P. O. Box 952054
Sacramento, CA 94252-2054

6. Contractor Contract Coordinator
The Contractor’s contract coordinator for this Agreement is the Authorized Representative listed below. Unless otherwise informed, any notice, report, or other communication required by this Agreement may be mailed by first class mail, or sent through a commercial courier to the Authorized Representative at the following address:

Authorized Representative Name: Eric Wier
Authorized Representative Title: City Manager
Agency Name: City of Crescent City
Address: 377 J Street
Crescent City, CA 95531
Phone No.: (707) 464-7483
Email Address: [email protected]

7. Effective Date, Term of Agreement, and Deadlines
A. This Agreement is effective upon approval by the Department, which is the date executed by all parties (such date, the “Effective Date”).

B. This Agreement shall terminate on June 30, 2030.

City of Crescent City
23-PLHA-18498

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
C. Except for predevelopment expenses for construction projects funded by PLHA and costs to develop and prepare the Plan and the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds. Reimbursement of expenses to prepare the Plan and the PLHA application are subject to the cap on administrative fees.

D. Any Grant funds which have not been expended by the expenditure deadline shall be disencumbered and revert to the Department. The expenditure deadline is fifty-eight months from the date of the budget appropriation for each year of funds included in this Agreement.

City of Crescent City
23-PLHA-18498

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

BUDGET DETAIL AND PAYMENT PROVISIONS

1. Budget Detail
The budget detail is contained in Exhibit E in this Agreement.

Contractor will be responsible for maintaining oversight of grant amounts and determining whether an amended PLHA Plan is required due to reallocation of more than ten percent among Activities funded per Section 302(c)(5).

2. Conditions of Disbursement
Prior to receiving any Grant funds, the Contractor shall submit the following for the Department’s approval:

A. Government TIN Form, as applicable.

B. No funding will be disbursed to Contractor unless Contractor and any delegating Local government has an approved Housing Element and is in compliance with the Housing Element Annual Progress Report requirements, pursuant to PLHA Program Guidelines section 302(a) and (b).

C. Contractor shall not be eligible to receive a new allocation if the Contractor has accrued an uncommitted amount of four times the pending allocation if the pending allocation is $125,000 or less; or $500,000 if the pending allocation is greater than $125,000 and less than $500,000; or the amount of the pending allocation if the allocation is $500,000 or more.

3. Performance
A. All funds must be disbursed within fifty-eight months of the budget appropriation.

Funds that are not disbursed within fifty-eight months of the budget appropriation will revert to the Housing Rehabilitation Loan Fund.

City of Crescent City
23-PLHA-18498

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date:10/05/2020
Prep. Date: 07/12/2024
B. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be reduced proportionate to those years already allocated, calculated at the time that the appropriation is reduced or terminated and reduced accordingly. All subsequent years shall be terminated, and the grant agreement shall be of no further force and effect, after amounts due for the period upon the reduced appropriation or termination are returned by the Contractor to the State. In this event, the State and Contractor shall be relieved of any and all obligations under this Agreement. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the State, or amend the Agreement and amount allocated to Contractor.

4. Fiscal Administration
A. The Contractor may request a disbursement of 100 percent of total awarded Grant funds after executing the Standard Agreement. Administrative costs related to the planning and execution of eligible activities shall not exceed five percent of the Grant amount.

B. A separate checking account for the Grant funds is not required. However, the Contractor shall deposit Grant funds in an interest-bearing checking or savings account insured by the federal or state government. All interest earned from the deposit of Grant funds shall be used for eligible Program activities and accounted for in Contractor’s annual report.

C. The Contractor shall make a good faith effort to minimize the number of disbursement requests by anticipating and requesting funds in advance.

D. The Contractor may request that Grant funds awarded for a certain eligible activity be moved to another activity without an amendment to this Agreement.

This request must be made in writing to HCD if the change from one activity to another exceeds ten percent of the grant amount and shall be effective only upon written HCD approval. HCD’s decision to approve or deny any such request shall be final, absent fraud, mistake or arbitrariness per Section 302(c)(5).

City of Crescent City
23-PLHA-18498

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

5. Budget Contingency Clause
A. It is mutually agreed that if the Budget Act of the subsequent years covered under this Agreement does not appropriate sufficient funds for the program this Agreement shall remain in force and effect until the time of notice of reduced or terminated appropriation, The Agreement shall be terminated by the State by providing Contractor written notice of not less than thirty days prior to the effective date of the termination. In the event of termination by the State due to lack of Budget appropriation, the State and Contractor shall be relieved of any and all obligations under this Grant Agreement on the effective date of termination and the Contractor shall return the amount for subsequent year allocations.

B. Subject to Section 5A. above, if funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the State, or amend the current Grant Agreement and amount allocated to Contractor.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

PLHA PROGRAM TERMS AND CONDITIONS

1. Effective Date, Commencement of Work
This Agreement is effective upon the date of the Department representative’s signature on page one of the fully executed Standard Agreement, STD 213. Contractor agrees that work under this agreement shall not commence until execution of the STD 213, (the “Effective Date”).

2. Strict Compliance
Contractor will strictly comply with the terms, conditions and requirements of the Permanent Local Housing Allocation (PLHA) Statutes, Guidelines, the Notice of Funding Availability (NOFA), and this Agreement.

3. Contractor’s Application for Funds
A. Contractor has submitted to the Department an Application for a Grant under the Program. The Department is entering into this Agreement based on, and in substantial reliance upon, Contractor’s facts, information, assertions and representations contained in that Application, and in any subsequent modifications or additions thereto approved by the Department. The Application and any approved modifications and additions thereto are hereby incorporated into this Agreement.

B. Contractor warrants that all information, facts, assertions and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of Contractor’s knowledge. In the event that any part of the Application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading in such a manner that would substantially affect the Department's approval, disbursement, or monitoring of the funding and the Grants or activities governed by this Agreement, then the Department may declare a breach hereof and take such action or pursue such remedies as are provided for breach hereof.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

4. Eligible Activities
Grant funds awarded to the Contractor and expended by either the Contractor or any entity to which Contractor awards funds shall be used for the eligible activities set forth in Exhibit A as required by the PLHA Statutes. The following additional requirements shall apply:

A. Each Contractor shall submit a Plan detailing:
1) The manner in which allocated funds will be used for eligible activities. 2) A description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below sixty percent of AMI. Programs targeted at households at or below sixty percent of AMI will be deemed to meet this requirement. 3) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
4) Evidence that the Plan was authorized and adopted by resolution by the Local government and that the public had an adequate opportunity to review and comment on its content.
5) The following for each proposed Activity:
a) A description of each proposed Activity, pursuant to Section 301 of the Guidelines and the percentage of funding allocated to it. The description shall specifically include the percentage of funds, if any, directed to Affordable Owner-Occupied Workforce Housing (AOWH).
b) The projected number of households to be served at each income level and a comparison to the unmet share of the Regional Housing Needs Allocation (RHNA) at each income level.
c) A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity. d) The period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least fifty-five years.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
6) The Plan is required to be for a term of five years. Local governments shall obtain approval of the Department for amendments made to the Plan in each succeeding year of the term of the Plan. Reallocations of more than ten percent of funds among Activities require amendment of the Plan, with approval granted by the governing body at a publicly noticed public meeting.
7) If funds are used for the acquisition, construction, or rehabilitation of forsale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
a) PLHA loan and any interest thereon shall be repaid to the Local government’s PLHA account. The Local government shall reuse the repayments consistent with the Eligible Activities per Section 301 of the Guidelines; or,
b) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or Moderate-Income household; or,
c) The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds of the equity-sharing agreement consistent with the Eligible Activities per Section 301 of the Guidelines. 8) If funds are used for the development of an affordable rental housing project, the Local government shall make the PLHA assistance in the form of a loan to the Sponsor of the project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust.
9) A program income reuse plan describing how repaid loans shall be reused for eligible activities specified in Section 301 of the Guidelines.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

5. Core Practices
A. A Contractor or Subrecipient must provide eligible activities in a manner consistent with the housing first practices described in California Code of Regulations, title 25, section 8409(b)(1)-(6). A Contractor or Subrecipient allocated funds for eligible activities that provide permanent housing shall incorporate the core components of Housing First as provided in Section 8255(b) of the Welfare and Institutions Code.

6. Monitoring Grant Activities
A. Contractor shall monitor the activities selected and awarded by them to ensure compliance with PLHA requirements. An onsite monitoring visit of Subrecipients and any other service providers shall occur whenever determined necessary by the Contractor, but at least once during the Grant period.

B. The Department will monitor the performance of the Contractor based on a risk assessment and according to the terms of this Agreement. The Department may also monitor any Subrecipients of the Contractor as the Department deems appropriate based on a risk assessment.

C. As requested by the Department, the Contractor shall submit to the Department all PLHA monitoring documentation necessary to ensure that Contractor and its Subrecipients are in continued compliance with PLHA requirements. Such documentation requirements and the submission deadline shall be provided by the Department at the time such information is requested from the Contractor.

7. Reporting/Audits
A. Commencing with the Effective Date of this Agreement and continuing through the Expiration Date, the Contractor shall submit an annual report to the Department by July 31 of each year that reports all activities from the previous fiscal year (7/1–6/30), on forms provided by the Department.

The first report will be due on July 31, 2025 and will report all activities from date of initial fund disbursement through June 30, 2025.

B. The annual report shall contain a detailed report which must include, at a minimum:
1) Identification of the Eligible Activities to which the Contractor committed program funds, and the income levels of households assisted.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
2) Amounts awarded to Subrecipients with the activity(ies) identified; 3) Identification of the Eligible Activities upon which the Contractor expended program funds, and the income levels of households assisted and the affordability level for any units assisted; and, 4) Close out report for contracts that were fully expended and in which all activities funded were completed during the fiscal year.

C. The Department may request additional information as needed to meet other applicable reporting or audit requirements.

D. The Contractor is responsible for the completion of audits and all costs of preparing audits.

E. The Department reserves the right to perform or cause to be performed a financial audit. At the Department’s request, the Contractor shall provide, at its own expense, a financial audit prepared by a certified public accountant.

F. If a financial audit is required by the Department, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in 24 CFR 85.36. 1) The Contractor shall notify the Department of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by the Department to the independent auditor's working papers.
2) The Contractor is responsible for the completion of audits and all costs of preparing audits.
3) If there are audit findings, the Contractor must submit a detailed response acceptable to the Department for each audit finding within ninety (90) days from the date of the audit finding report.

8. Retention and Inspection of Records
A. The Contractor is responsible for maintaining records, which fully disclose the activities funded by the Grant. Adequate documentation of each transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Grant funds.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
B. The Contractor agrees that the Department or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance of this Agreement. The Contractor agrees to provide the Department or its designee, with any relevant information requested. The Contractor agrees to permit the Department or its designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with the PLHA Statutes, the NOFA, and this Agreement.

C. The Contractor further agrees to retain all records for a period of five years after the end of the term of this Agreement:
1) If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues, which arise from it.
2) The Contractor also agrees to include in any contract that it enters into in an amount exceeding $10,000, the Department’s right to audit the contractor’s records and interview their employees. The Contractor shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Code Section 10115.10.

D. The determination by the Department of the eligibility of any expenditure shall be final. If the eligibility of any expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and HCD shall determine the reimbursement method for the amount disallowed.

E. The Contractor shall retain all books and records relevant to this Agreement for a minimum of five years after the end of the term of this Agreement. Records relating to any and all audits or litigation relevant to this Agreement shall be retained for five years after the conclusion or resolution of the matter.

9. Breach and Remedies
A. The following shall each constitute a breach of this Agreement:
1) Contractor’s failure to comply with the terms of this Agreement.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
2) Use of, or permitting the use of, Grant funds provided under this Agreement for any ineligible costs or for activities not approved under this Agreement.
3) Any failure to comply with the deadlines set forth in this Agreement.

B. In addition to any other remedies that may be available to the Department in law or equity for breach of this Agreement, the Department may:
1) Bar the Contractor from applying for future PLHA and other HCD funds; 2) Revoke any other existing PLHA award(s) to the Contractor; 3) Require the return of any unexpended PLHA funds disbursed under this Agreement;
4) Require repayment of PLHA funds disbursed and expended under this agreement;
5) Require the immediate return to the Department of all funds derived from the use of PLHA funds including, but not limited to recaptured funds and returned funds;
6) Seek, in a court of competent jurisdiction, an order for specific performance of the defaulted obligation or the appointment of a receiver to complete the technical assistance in accordance with the PLHA Program requirements; and,
7) Seek such other remedies as may be available under the relevant agreement or any law.

C. All remedies available to the Department are cumulative and not exclusive.

D. The Department may give written notice to the Contractor to cure the breach or violation within a period of not less than fifteen days.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

10. Termination
A. The Department may terminate this Agreement at any time for cause by giving a minimum of thirty days’ notice of termination, in writing, to the Contractor. Cause shall consist of, violations of any terms and/or special conditions of this Agreement, the PLHA Statutes, or the NOFA. Upon termination of this Agreement, unless otherwise approved in writing by the Department, any unexpended funds received by the Contractor shall be returned to the Department within thirty days of the notice of termination.

B. This Agreement is subject to any additional restrictions, limitations or conditions, or statute, regulations or any other laws, whether federal or those of the State of California, or of any agency, department, or any political subdivision of the federal or the State of California governments, which may affect the provisions, terms or funding of this Agreement in any manner.

C. The Department has the option to terminate this Agreement under the thirty-day cancellation clause or to amend this Agreement to reflect any reduction of funds.

11. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of the Department to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Contractor of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the Department to enforce these provisions.

12. Relocation
Contractor shall comply with all requirements of applicable California relocation law (Gov. Code, § 7260 et seq. and the regulations promulgated thereunder at Cal. Code Regulations, Title. 25, § 6000 et seq.). Any relocation plan for the Development shall be subject to the review and approval by the State.

City of Crescent City
23-PLHA-18498

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

13. Special Conditions Contractors and Subrecipients
The Contractor agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E. These conditions shall be met to the satisfaction of the Department prior to disbursement of funds. The Contractor shall ensure that all Subrecipients are made aware of and agree to comply with all conditions of this Agreement and the applicable State requirements governing the use of Grant funds. The Contractor shall ensure that all Subrecipients are qualified to do business and in good standing with the California Secretary of State and the California Franchise Tax Board. Failure to comply with these conditions may result in cancellation of this Agreement.

14. Compliance with State and Federal Laws, Rules, Guidelines and Regulations The Contractor agrees to comply with all State and Federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the Grant, the Contractor, its Subrecipients, and any other Grant activity.

15. Litigation
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of the Department, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Contractor shall notify the Department immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or the Department and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of the Department.

City of Crescent City
23-PLHA-18498

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024

PROGRAM-SPECIFIC PROVISIONS AND SPECIAL CONDITIONS

1. Program-Specific Provisions
The following are project-specific terms and conditions (referred to as enumerated provision(s) for ease of reference in prior exhibits) and shall inform the references made to project-specific information not contained in those prior exhibits.

Budget Detail:

Contractor has been awarded the following grant activity amounts for 2020: $125,660 Contractor has been awarded the following grant activity amounts for 2021: $142,274 Contractor has been awarded the following grant activity amounts for 2022: $76,264 Estimated five-year allocation may not exceed: $485,092 Payees:

A. The authorized Payee(s) is/are as specified below:

Name: City of Crescent City Total Amount: $344,198
Plan:

Activity 1- The City of Crescent city plans to direct 100% of the City’s PLHA funding to Activity (1) to the development of new affordable rental housing projects serving households earning up to 120% of the Area Median Income.

Funding Allocation Year 2019 2020 2021 2022 2023
Type of Activity N/A
Affordable
Rental
Housing
Affordable
Rental
Housing
Affordable
Rental
Housing
Affordable
Rental
Housing
Percentage of Funds
Allocated for Each Activity N/A 95% 95% 95% 95%
Area Median Income
Level Served N/A 120% 120% 120% 120%
Administrative Costs N/A 5% 5% 5% 5%
City of Crescent City
23-PLHA-18498

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021 (RD 3) 08/17/2022 (RD 4) 12/29/2023 Approved Date: 10/05/2020
Prep. Date: 07/12/2024
Total N/A 100% 100% 100% 100%

2. Special Conditions
The following Special Conditions are applicable to this Standard Agreement:

None.

Permanent Local Housing Allocation
Final Guidelines
Gavin Newsom, Governor
State of California
Alexis Podesta, Secretary
Business, Consumer Services and Housing Agency
Douglas R. McCauley, Acting Director
California Department of Housing and Community Development 2020 West El Camino Avenue, Suite 150
Sacramento, CA 95833
October 2019
Department of Housing and Community Development 2 2019 PLHA Final Guidelines The matters set forth herein are regulatory mandates, and are adopted in accordance with the authorities set forth below:

Quasi-legislative regulations … have the dignity of statutes … [and]… delegation of legislative authority includes the power to elaborate the meaning of key statutory terms… Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 800 (1999) In consultation with stakeholders, the California Department of Housing and Community Development (Department) may adopt Guidelines to implement this Section, including determining allocation methodologies. Any guideline, rule, policy, or standard of general application employed by the Department in implementing this chapter shall not be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Title 2 Government Code, Part 1 of Division 3).

NOTE: Authority Cited: Health and Safety Code Section 50470, subdivision (d).

The Department reserves the right, at its sole discretion, to suspend or amend the provisions of these Guidelines, including, but not limited to, grant award amounts.

Department of Housing and Community Development 3 2019 PLHA Final Guidelines

INTRODUCTION
Chapter 364, Statutes of 2017 (SB 2, Atkins) was part of a 15-bill housing package aimed at addressing the state’s housing shortage and high housing costs. Specifically, it establishes a permanent source of funding intended to increase the affordable housing stock in California. The revenue from SB 2 will vary from year to year, as revenue is dependent on real estate transactions with fluctuating activity. The legislation directs the California Department of Housing and Community Development (Department) to use 70 percent of the revenue collected, beginning in calendar year 2019, to provide financial assistance to local governments for eligible housing-related projects and programs to assist in addressing the unmet housing needs of their local communities. This program is hereafter referred to as the Permanent Local Housing Allocation (PLHA) program.

Guidelines for the PLHA program are organized into five Articles as follows:

Article I. General provisions: This article includes information on the purpose of the Guidelines, program objectives, and definitions used throughout the document.

Article II. Program funding: This article describes allocation formulas and methodologies, and award amounts.

Article III. Formula allocation component: This article describes the requirements for Applicants to apply for funds under the formula allocation of the PLHA program.

Article IV. Competitive allocation component: This article describes requirements and uses for PLHA competitive allocation funds.

Article V. Administration: This article describes administrative functions such as terms, non-performance remedies, and reporting and monitoring requirements.

Department of Housing and Community Development 4 2019 PLHA Final Guidelines Permanent Local Housing Allocation (PLHA) Program:
2019 Guidelines
Table of Contents
ARTICLE I. GENERAL PROVISIONS 5
Section 100. Purpose and Scope 5
Section 101. Definitions 5
ARTICLE II. PROGRAM FUNDING 9
Section 200. Allocations 9
Section 201. Award Amounts 10
ARTICLE III. FORMULA ALLOCATION COMPONENT 11
Section 300. Eligible Applicants 11
Section 301. Eligible Activities 12
Section 302. Threshold Requirements 13
Section 303. Application Review 16
Section 304. Deadlines and Funding Requirements 17
ARTICLE IV. COMPETITIVE ALLOCATION COMPONENT 17
Section 400. Eligible Applicants 17
Section 401. Eligible Activities 18
Section 402. Threshold Requirements 18
Section 403. Selection Criteria 20
Section 404. Application Review 22
Section 405. Deadlines and Funding Requirements 23
ARTICLE V. ADMINISTRATION 23
Section 500. Accounting Records 23
Section 501. Audits/Monitoring of Project Files 24
Section 502. Cancellation and Termination 25
Section 503. Reporting 26
Department of Housing and Community Development 5 2019 PLHA Final Guidelines ARTICLE I. GENERAL PROVISIONS
Section 100. Purpose and Scope
(a) These Guidelines (hereinafter “Guidelines”) implement, interpret, and make specific Chapter 364, Statutes of 2017 (SB 2, Atkins - hereinafter “SB 2”) as authorized by Health and Safety Code (HSC) Section 50470, which created the Building Homes and Jobs Trust Fund and the PLHA program. The principal goal of this program is to make funding available to eligible local governments in California for housing-related projects and programs that assist in addressing the unmet housing needs of their local communities. Twenty percent of the funding in the Building Homes and Jobs Trust Fund is required to be expended for Affordable Owner-Occupied Workforce Housing, and the program prioritizes investments that increase the supply of housing to households that are at or below 60 percent of the Area Median Income (AMI), adjusted for household size.
(b) These Guidelines establish terms, conditions, and procedures for local governments to submit applications to the Department for funds from the PLHA program’s three components, as listed below:
(1) Entitlement formula component per HSC 50470(b)(2)(B)(i)(I) (2) Non-entitlement formula component per HSC 50470(b)(2)(B)(i)(II) (3) Non-entitlement competitive grant program component per HSC 50470(b)(2)(B)(i)(I) (eligible Applicants are the same as for component 2 above)
(c) The non-entitlement competitive grant program component prioritizes assistance to persons experiencing or At risk of homelessness.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(A), subdivision (b)(2)(B)(i) and subdivision (b)(2)(B)(ii)(I-V).

Section 101. Definitions
All terms not defined below shall, unless their context suggests otherwise, be interpreted in accordance with the meanings of terms described in HSC Section 50470. (a) “Accessory dwelling unit” (ADU) means a dwelling unit which is attached, detached or located within the living area of the existing dwelling or residential dwelling unit and which provides complete independent living facilities for one or more persons pursuant to Government Code (GC) Section 65852.2 and 65852.22. It shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the single-family dwelling. An Accessory dwelling unit also includes the following: an efficiency unit, as defined in Section 17958.1 of the HSC, or a manufactured home, as Department of Housing and Community Development 6 2019 PLHA Final Guidelines defined in Section 18007 of the HSC.
(b) "Activity" means any single eligible undertaking carried out as part of an Applicant's allocation(s) under the Program.
(c) “Affordable” means a housing unit that satisfies at least one of the following criteria:

1. If the unit is being rented to low-income, Very low-income or Extremely low-income households, it complies with the Multifamily Housing Program guidelines Section 7312 and the Section 7301 definition of “Affordable Rent”; or

2. If the unit is being sold, it is offered at an “Affordable housing cost”, as published in the Fannie Mae Selling Guide, Part B, Debt to Income Ratios, as updated annually
(https://www.fanniemae.com/content/guide/selling/b3/6/02.html#DTI.20Rat ios), and it complies with the income limits stated in the definitions of Moderate-Income and Lower-Income in this section; or

3. If the unit is being rented to Moderate-Income households, it is available at a gross rent, including a utility allowance, that does not exceed 30 percent of the applicable income eligibility level, and complies with the definition of Moderate-Income in these guidelines
(d) "Affordable Owner-Occupied Workforce Housing" (AOWH) means owner-occupied housing per HSC Section 50092.1 that is affordable to persons and families of low or moderate income, as that term is defined in HSC Section 50093, except in High-cost areas where Moderate-income shall include households earning up to 150 percent of AMI.
(e) “Annual Progress Report” (APR) means the Housing Element APR required by GC Section 65400 on the prior year’s activities and due to the Department April 1 of each year.
(f) “Annual Report" means a form issued by the Department and completed by a Local government awarded PLHA funds on which the Local government documents the uses and expenditures of any allocated funds and outcomes achieved. (g) "Applicant" means an eligible Local government applying for the program to administer one or more eligible activities. Applicant also means a Local or Regional Housing Trust Fund delegated by an eligible Local government to apply for the program and administer its allocation in accordance with all program rules.

Department of Housing and Community Development 7 2019 PLHA Final Guidelines (h) “Area Median Income” or “AMI” means the most recent applicable county median family income published by the Department, available at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml (i) “At risk of homelessness” means the same as defined in Title 24 Section 578.3 of the Code of Federal Regulations and also includes any household receiving rental assistance funded by the California Emergency Solutions and Housing (CESH) program or the California Homeless Emergency Aid Program (HEAP). (j) “Capitalized Reserve for Services” means the reserve funded by the Local government pursuant to Section 301(a)(5) to address project supportive service budget deficits attributable to shortfalls in service funding sources.
(k) “Comprehensive Housing Affordability Strategy” or “CHAS” means annual data compiled by the United States Census Bureau for the U.S. Department of Housing and Urban Development (HUD) to document the extent of housing problems and housing needs, particularly for low-income households.
(l) "Community Development Block Grant" or "CDBG" means the program created pursuant to Title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5301 et seq., as amended.
(m) “Department” means the California Department of Housing and Community Development.
(n) “Extremely Low Income” has the meaning set forth in HSC Section 50106, which is a maximum of 30 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (o) “Fund” means the Building Homes and Jobs Trust Fund pursuant to HSC Section 50470.
(p) “High-cost area” means those counties defined as high cost by the Federal Housing Finance Agency (at: https://www.fhfa.gov/DataTools/ and those counties for which HUD adjusted the Very low income and low-income rents due to high costs (at:
https://www.huduser.gov/portal/pdrdatas_landing.html), as published by the Department in the annual PLHA Notice of Funding Availability.
(q) “Local government” means any city, including a charter city, any county, including a charter county, or a city and county, including a charter city and county.

Department of Housing and Community Development 8 2019 PLHA Final Guidelines (r) “Local Housing Trust Fund” or “Regional Housing Trust Fund” means a public, joint public and private fund or charitable nonprofit organization described in Section 501(c)(3) of the Internal Revenue Code, which was established by legislation, ordinance, resolution (including nonprofit articles of incorporation), or a public-private partnership organized to receive specific revenue to address local or regional housing needs.
(s) “Low or Lower Income” has the meaning set forth in HSC Section 50079.5, which is a maximum of 80 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (t) “Moderate-Income” has the meaning set forth in HSC Section 50093, which is a maximum of 120 percent AMI, or in High-cost areas, 150 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml. (u) “Non-entitlement local government” means a Local government in an area which is not a metropolitan city or part of an urban county, a Local government that, as of September 1, 2017, was an incorporated city with a population of less than 50,000 or a county with an unincorporated area population of less than 200,000 persons which had not entered into a three-year Urban County Cooperation Agreement, or a Local government that was not otherwise entitled to receive CDBG funds directly from HUD. (v) “Operating subsidies” means payments to owners of affordable housing developments that make the housing more affordable by covering a portion of the ongoing costs of operating the development. Such payments would have the same effect as rental assistance.
(w)“Owner-occupied” means a dwelling which is occupied by the owner and includes a single family dwelling or a dwelling unit in a stock cooperative, as defined by Business and Professions Code (BPC), Section 11003.2, a community apartment project, as defined by BPC Section 11004, or a condominium project, as defined by subdivision (c) of BPC Section 11004. 5.
(x) "Plan" means the document submitted by the Applicant to the Department as part of a complete application in which the Applicant proposes to use allocated funds for at least one eligible Activity. The Plan shall have a term of five years. In succeeding years, the Local government is required to obtain the approval of the Department for any amendments made to the Plan, as set forth in Section 302(c)(5). (y) “Permanent Local Housing Allocation Program", “Program”, or "PLHA" means the program developed to annually allocate 70 percent of the moneys deposited into the Fund pursuant to HSC Section 50470(b)(2)(B)(i).

Department of Housing and Community Development 9 2019 PLHA Final Guidelines (z) “Permanent supportive housing” has the same meaning as in HSC Section 50675.14, that is, housing with no limit on the length of stay, that is occupied by the target population, and that is linked to onsite or offsite services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community.

Permanent supportive housing may include associated facilities if used to provide services to housing residents. Permanent supportive housing does not include “health facility” as defined by HSC Section 1250 or any “alcoholism or drug abuse recovery or treatment facility” as defined by HSC Section 11834.02 or “Community care facility” as defined in HSC Section 1502, “Mental health rehabilitation centers” as defined in Section 5675 of the Welfare and Institutions Code (WIC), or other residential treatment programs.
(aa)“Regional Housing Needs Allocation" or "RHNA" means the share of the regional housing need represented by persons at all income levels within the area significantly affected by the general plan of the city or county allocated to an Applicant Local government pursuant to GC Section 65584(b).
(bb)“Sponsor” means the legal entity or combination of legal entities with continuing control of a Rental Housing Development. Where the borrowing entity is or will be organized as a limited partnership, Sponsor includes the general partner or general partners who have effective control over the operation of the partnership, or, if the general partner is controlled by another entity, the controlling entity. Sponsor does not include the seller of the property to be developed as the rental housing Project, unless the seller will retain control of the Project for the period necessary to ensure Project feasibility as determined by the Department.
(cc) “Very Low Income” has the meaning set forth in HSC Section 50105, which is a maximum of 50 percent of AMI. Grantees shall utilize income limits issued by the Department at the following link:
http://www.hcd.ca.gov/grants-funding/income-limits/state-and-federal-incomelimits.shtml.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470.5 and 50470, subdivision (b)(2).

ARTICLE II. PROGRAM FUNDING
Section 200. Allocations
(a) SB 2 created a dedicated revenue source for affordable housing and directed the Department to make available 70 percent of the moneys in the Building Homes and Jobs Trust Fund, collected on and after January 1, 2019, to Local governments through the following allocations:

Department of Housing and Community Development 10 2019 PLHA Final Guidelines (1) Ninety percent of the moneys available shall be allocated based on the formula used under Federal law to allocate CDBG funds within California. This is the formula specified in Title 42 United States Code (USC), Section 5306. (A) The amount of funds awarded to each Local government eligible for the entitlement formula component shall be determined by the 90 percent of PLHA funds available pursuant to this paragraph (1) and the percentage of funds received by the entitlement Local government in the CDBG federal fiscal year 2017 allocation process performed by HUD.
(B) Through the formula specified in paragraph (1), the percentage of funds allocated to Non-entitlement local governments shall be distributed to Non-entitlement local governments through a competitive grant program. (2) Ten percent of the moneys available shall be allocated equitably among Non-entitlement local governments. The equitable allocation awarded to each Local government eligible for the Non-entitlement formula component shall be based on the sum of: (1) 50 percent of the funding available for the Non-entitlement formula component divided by the number of local governments eligible for the Non-entitlement formula component and (2) 50 percent of the funding allocated in proportion to each Non-entitlement local government’s share of the total most severe housing need in California’s Non-entitlement local governments, based upon the most recent HUD Comprehensive Housing Affordability Strategy.
(b) After funds are appropriated by the Legislature as part of the budget act, the Department will issue one or more Notices of Funding Availability (NOFA). Local governments shall submit an application under the NOFA pertaining to the specific allocation for which the Local government is eligible.
(c) It is recommended that Local governments that were urban counties in accordance with the distribution of funds pursuant to the formula specified in 42 USC, Section 5306 for the federal fiscal year 2017 provide a proportional share of their allocations to Local governments within their county with which they had a three-year Urban County Cooperation Agreement as of September 1, 2017, provided that these Local governments meet the threshold requirements of the PLHA and expend sub-allocated funds for eligible activities within the deadlines of the Standard Agreement governing the sub-allocation.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

Section 201. Award Amounts
(a) The formula allocation amounts derived pursuant to the formulas in Section 200 will be announced in the NOFA.

Department of Housing and Community Development 11 2019 PLHA Final Guidelines (b) The maximum application amount and the minimum application amount for the competitive allocation will be stated in the NOFA.
(c) An Applicant may apply for its formula allocation from the current and two prior NOFAs for which it did not receive an award, provided that the award meets the requirements of Section 304(a).

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

ARTICLE III. FORMULA ALLOCATION COMPONENT
Section 300. Eligible Applicants
(a) Eligible Applicants for the entitlement formula component described in Section 100(b)(1) are limited to the metropolitan cities and urban counties allocated a grant for the federal fiscal year 2017 pursuant to the federal CDBG formula specified in 42 USC, Section 5306.
(b) Eligible Applicants for the non-entitlement formula component described in Section 100(b)(2) and the competitive grant program component described in Section 100(b)(3) are limited to the Non-entitlement local governments. (c) A Local government may delegate another Local government to submit an application and administer on its behalf its formula allocation of Program funds, provided that the Local governments enter into a legally binding agreement and the funds are expended for eligible Activities and consistent with Program requirements. The delegating Local government shall be identified in the application. The administering Local government shall be responsible for all Program requirements.
(d) A Local government may delegate a Local or Regional Housing Trust Fund to submit an application and administer on its behalf its formula allocation of Program funds, provided that the Local government enters into a legally binding agreement with the Local or Regional Housing Trust Fund and the funds are expended for eligible Activities and consistent with Program requirements. The delegating Local government shall be identified in the application. The Local or Regional Housing Trust Fund shall be responsible for all Program requirements. (e) An Applicant shall not be eligible to receive a new allocation of PLHA funds if it has an uncommitted amount of formula PLHA funds greater than the following:
(1) Four times the pending annual allocation if the pending annual allocation is $125,000 or less;
(2) $500,000 if the pending annual allocation is greater than $125,000 and less than $500,000;
Department of Housing and Community Development 12 2019 PLHA Final Guidelines (3) The amount of the pending annual allocation if the pending allocation is $500,000 or more.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B).

Section 301. Eligible Activities
(a) Eligible Activities are limited to one or more of the following:
(1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is Affordable to Extremely low-,Very low-, Low-, or Moderate-income households, including necessary Operating subsidies.
(2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in high-cost areas. ADUs shall be available for occupancy for a term of no less than 30 days.
(3) Matching portions of funds placed into Local or Regional Housing Trust Funds. (4) Matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176. (5) Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing.
(6) Assisting persons who are experiencing or At risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
(A) This Activity may include subawards to Administrative Entities as defined in HSC Section 50490(a)(1-3) that were awarded CESH program or HEAP funds for rental assistance to continue assistance to these households. (B) Applicants must provide rapid rehousing, rental assistance, navigation centers, emergency shelter, and transitional housing activities in a manner consistent with the Housing First practices described in 25 CCR, Section 8409, subdivision (b)(1)-(6) and in compliance with WIC Section 8255(b)(8). An Applicant allocated funds for the new construction, rehabilitation, and preservation of Permanent supportive housing shall incorporate the core Department of Housing and Community Development 13 2019 PLHA Final Guidelines components of Housing First, as provided in WIC Section 8255, subdivision (b). (7) Accessibility modifications in Lower-income Owner-occupied housing. (8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments. (9) Homeownership opportunities, including, but not limited to, down payment assistance.
(10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more Affordable housing Projects, or matching funds invested by a county in an Affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the Project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an Affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low-interest deferred loan to the Affordable housing Project.
(b) A Local government that receives an allocation shall use no more than 5 percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in Section 301 are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation. (c) Two or more Local governments that receive PLHA allocations may expend those moneys on an eligible jointly funded project as provided for in Section 50470 (b)(2)(B)(ii)(IV). An eligible jointly funded project must be an eligible Activity pursuant to Section 301(a) and be located within the boundaries of one of the Local governments.
(d) Entitlement Local governments may use the flow of PLHA funds to incentivize private lender loans and to guarantee payments for some or all public agency bond financings for activities consistent with the uses identified in Section 301 “Eligible Activities”. This loan guarantee Activity must be identified and fully explained in the Applicant’s “Plan”.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivisions (b)(2)(B)(ii)(IV), (b)(2)(D)(i-x), and (b)(3).

Section 302. Threshold Requirements
Applicants must meet all the following threshold requirements for participation in the formula allocation:
(a) Housing Element compliance: The Applicant and any delegating Local government, if applicable, must have a Housing Element that has been adopted by the Local Department of Housing and Community Development 14 2019 PLHA Final Guidelines government’s governing body by the application deadline and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to GC Section 65585. A Local government’s current Housing Element compliance status can be obtained by referencing the Department’s website at http://www.hcd.ca.gov/community-development/housing-element. (b) APR on the Housing Element submitted to the Department: The Applicant and any delegating Local government, if applicable, must submit to the Department the APR required by GC Section 65400 for the current or prior year by the application deadline date.
(1) Please be advised that the Department will not accept other reports in lieu of the APR. Housing Authority Financial Reports, Redevelopment Reports, and other similar reports will not be accepted as meeting this requirement. If uncertain of the status of the report submittal for a Local government, please contact the Department for more information.
(c) Submit, by the deadline specified in the NOFA, on a form made available by the Department, a complete application which shall meet the following minimum requirements:
(1) Application requests an allocation pursuant to Section 200 in order to carry out one or more of the eligible activities described in Section 301. Except for a jointly funded project as described in Section 301(c), any activities must be carried out within the jurisdiction of the Applicant Local government. (2) Submission of the application is authorized by the governing boards of the Applicant.
(3) Certification in the resolution that, if the Local government proposes allocation of funds for any Activity to another entity, the Local government’s selection process shall avoid conflicts of interest and shall be accessible to the public. For the purposes of this paragraph, “entity” means a housing developer or program operator; “entity” does not mean an administering Local government to whom a Local government delegates its PLHA formula allocation, pursuant to Section 300(d).
(4) A Plan detailing:
(A) The manner in which allocated funds will be used for eligible Activities. (B) A description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below 60 percent of AMI. Programs targeted at households at or below 60 percent of AMI will be deemed to meet this requirement.

Department of Housing and Community Development 15 2019 PLHA Final Guidelines (C) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
(D) Evidence that the Plan was authorized and adopted by resolution by the Local government and that the public had an adequate opportunity to review and comment on its content.
(E) The following for each proposed Activity:
(i) A description of each proposed Activity, pursuant to Section 301, and the percentage of funding allocated to it. The description shall specifically include the percentage of funds, if any, directed to AOWH. (ii) The projected number of households to be served at each income level and a comparison to the unmet share of the RHNA at each income level. (iii)A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity.
(iv)The period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least 55 years. (5) The Plan submitted in response to the NOFA shall be for a term of five years. Local governments shall obtain approval of the Department for amendments made to the Plan in each succeeding year of the term of the Plan. Reallocations of more than 10 percent of funds among Activities require amendment of the Plan, with approval granted by the governing body at a publicly noticed public meeting. (6) A certification that, if funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
(A) The PLHA loan and any interest thereon shall be repaid to the Local government’s PLHA account. The Local government shall reuse the repayments consistent with Section 301; or
(B) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or Moderate-Income household; or
(C)The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds Department of Housing and Community Development 16 2019 PLHA Final Guidelines of the equity-sharing agreement consistent with this section. (7) A certification that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make the PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement shall restrict occupancy and rents in accordance with the Local government-approved underwriting of the Project for a term of at least 55 years.
(8) A Program income reuse plan describing how repaid loans will be reused for eligible activities specified in Section 301.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Section 303. Application Review
(a) Applicants must submit a complete application by the deadline stated in the NOFA in order to be eligible for funding. Application forms provided by the Department will be available upon release of the NOFA and will require Applicants to submit the forms and other documents to demonstrate that the Local government has met threshold requirements.
(b) The Department may request additional information to complete its review. (c) Applications recommended for funding are subject to conditions specified by the Department. Applicants will receive an official letter of award after the Department approves funding recommendations.
(d) The Department may issue an Over-the-Counter formula allocation NOFA after completing the NOFA process so that Local governments who were not able to submit formula allocation applications by the application deadline will have another opportunity to do so.
(e) If funding proposed in Local government Plans for AOWH activities is lower than 20 percent of the moneys available in the Fund, the Department may require Local governments to use a specific percentage of their annual formula allocations in some future year for AOWH activities as part of the annual funding process.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(A).

Department of Housing and Community Development 17 2019 PLHA Final Guidelines Section 304. Deadlines and Funding Requirements
(a) The initial PLHA application, including the Plan, must be submitted within 48 months of the budget appropriation (for example, the budget appropriation for 2019 is July 1, 2019, so the application deadline is June 30, 2023). (b) Funds allocated to Local governments that do not submit a complete application by the deadline stated in subsection (a) will revert to the Housing Rehabilitation Loan Fund for the Multifamily Housing Program or for Department-administered technical assistance to Local governments.
(c) A Local government may petition the Department to return any funds allocated to it to be used for the Multifamily Housing Program.
(d) Except for predevelopment expenses for construction projects funded by PLHA and costs to develop and prepare the Plan and the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds. Reimbursement of expenses to prepare the Plan and the PLHA application are subject to the cap on administrative fees. (e) After the Standard Agreement and attachments have been finalized, the Local government will follow provided instructions for signing all required documents. The Local government must submit all supporting materials and a signed Standard Agreement within the timeline provided in the instruction. (f) After the Standard Agreement has been executed by the state, the Local government may submit a request for 100 percent of the funds allocated to be used for eligible expenditures for the Activity(ies) that received the award, and subject to the terms and conditions of the Standard Agreement.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i) and subdivision (b)(2)(B)(ii)(VI).

ARTICLE IV. COMPETITIVE ALLOCATION COMPONENT
Section 400. Eligible Applicants
(a) Eligible Applicants for the non-entitlement competitive allocation described in Section 100(b)(3) are limited to Non-entitlement local governments. For development of Rental Housing Projects, the Sponsor must be a co-Applicant.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I).

Department of Housing and Community Development 18 2019 PLHA Final Guidelines Section 401. Eligible Activities
(a) Eligible Activities are limited to the following and must take place within the jurisdiction of the Applicant Local government:
(1) Development of new multifamily rental housing that is Affordable to households at or below 60 percent of AMI or substantial rehabilitation of multifamily rental housing that will be Affordable to households at or below 60 percent of AMI, but which is not currently restricted as Affordable housing; or (2) Assistance to persons who are experiencing or At risk of homelessness, including, but not limited to, through rapid rehousing, or rental assistance, supportive services and case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers, or new construction, rehabilitation, or preservation of permanent or transitional rental housing.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I)(ia), (b)(2)(B)(i)(I)(ib) and subdivision (b)(2)(B)(ii)(V).

Section 402. Threshold Requirements
Applicants must meet all the following threshold requirements for participation in the competitive allocation:
(a) Housing Element compliance: The Applicant must have a Housing Element that has been adopted by the jurisdiction’s governing body by the application deadline date and subsequently determined to be in substantial compliance with state Housing Element Law pursuant to GC Section 65585. A Local government’s current Housing Element compliance status can be obtained by referencing the Department’s website at http://www.hcd.ca.gov/community-development/housing-element. (b) APR on the Housing Element submitted to the Department: The Applicant must submit to the Department the APR required by GC Section 65400 for the current or prior year by the application deadline date.
(1) Please be advised that the Department will not accept other reports in lieu of the APR. Housing Authority Financial Reports, Redevelopment Reports, and other similar reports will not be accepted as meeting this requirement. If uncertain of the status of the report submittal for a Local government, please contact the Department for more information.
(c) Submit by the deadline specified in the NOFA, on a form made available by the Department, a complete application which shall meet the following minimum requirements:
(1) Application requests a grant pursuant to Section 100(b)(3) in order to carry out one Department of Housing and Community Development 19 2019 PLHA Final Guidelines or both of the eligible Activities set forth in Section 401. (2) Submission of the application is authorized by the governing board of the Applicant and by the developer co-applicant, if any.
(3) Certification in the resolution that, if the Local government proposes allocation of funds for any Activity to another entity, the selection process shall avoid conflicts of interest, and shall be accessible to the public.
(4) Demonstration of readiness, including site control for development Projects, land use entitlements, environmental review and commitments of other funding and resources required, as further set forth in the NOFA;
(5) Underwriting requirements:
(A)Uniform Multifamily Regulations Subchapter 19 of Title 25, Division 1, Chapter 7 (commencing with Section 8300), as amended from time to time, and the Multifamily Housing Program Guidelines (commencing with Section 7300), as amended from time to time, are hereby incorporated by reference into this subchapter and shall apply to Rental Housing Developments receiving assistance under the PLHA competitive allocation. In the event of a conflict between the provisions of Subchapter 19 and these Guidelines, the provisions of these Guidelines shall prevail.
(i) Section 8312(c) of the Uniform Multifamily Regulations is hereby amended to read:
(c) For Projects utilizing 4 percent tax credits, Developer Fee payments shall not exceed the amount that may be included in Project costs pursuant to 4 CCR, Section 10327. In addition, the Developer Fee paid from development funding sources shall not exceed the following:
(1) For acquisition and/or rehabilitation Projects, or adaptive reuse Projects, the lesser of the amount of Developer Fee in Project costs or $2,000,000. (2) For new construction Projects, the base limit shall be the lesser of the amount that may be included in Project costs or $2,200,000. To arrive at the final limit on Developer Fee paid from development funding sources, the base limit shall then be multiplied by a ratio that is the average of (i) the difference between 2 and the Project’s high-cost ratio, as calculated pursuant to 4 CCR, Section 10317(i)(6) or successor language and (ii) 100 percent.
(ii) Section 8312(d) of the Uniform Multifamily Regulations shall not apply. (iii)Section 8314(a)(1)(A) of the Uniform Multifamily Regulations is amended to read:
(A) Approved deferred Developer Fee, pursuant to Section 8312, provided that the aggregate of the Developer Fee paid from sources and paid as deferred shall not exceed $3,500,000.

Department of Housing and Community Development 20 2019 PLHA Final Guidelines (B)Period of affordability: All assisted rental units shall be restricted for not less than 55 years.
(C)All development Projects shall demonstrate fiscal integrity.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Section 403. Selection Criteria
(a) Applications submitted within a competitive funding round shall be evaluated using the following criteria. Total available points shall equal 100.

1. Priority Points – 25 points
A. Population - 5 points
(i) If the Applicant is a county that has a population of 200,000 or less within the unincorporated areas of the county, the Applicant shall receive all points.

B. Prior Award – 5 points
(i) If the Applicant did not receive an award based on the formula specified in 42 USC, Section 5306 in 2016, the Applicant shall receive all points.

And either C (i) or C (ii) or C (iii) below:

C. Activity
(i) Assistance for Homeless Persons through Program Activities – 15 points
(a) Applications to assist persons experiencing or At risk of homelessness, including, but not limited to, through programs providing rapid rehousing, or rental assistance, or operating assistance to navigation centers shall receive all points.

Or
(ii) Assistance to Homeless Persons through Development of Navigation Centers– 15 points
(a) Applications for construction of navigation centers shall receive all points.

Or
Department of Housing and Community Development 21 2019 PLHA Final Guidelines (iii) Assistance for Homeless Persons through Rental Projects – 15 points (a) Applications for the new construction, rehabilitation, or preservation of permanent or transitional rental housing in which all or at least 10 percent of the units are restricted to occupancy by tenants who are homeless or At risk of homelessness shall receive all points.

2. Evaluation Criteria – 75 points
Precise scoring for these factors will be set forth in the NOFA.

A. Community Need – 30 points
(i) Applicants will receive up to a maximum of 30 points based on the rate of households experiencing the most severe housing need according to the most recent HUD CHAS dataset in the Applicant Local government.

Applicants will receive points in proportion to this percentage.

B. Applicant Administrative Experience – 15 points
(i) Applicants with prior experience administering local, state or federal affordable housing or community development programs or who have entered into a contract with an entity with prior experience in the implementation of local, state or federal affordable housing or community development programs will receive up to 15 points.

C. Demonstrated Capacity – 30 points
(i) Capacity points will be based on:
(a) Sponsor experience in Affordable Rental Housing Development and ownership (Up to 30 points) or
(b) Navigation center development experience (for development of these facilities) (Up to 30 points) or
(c) Program Operator experience (for non-development Activities) (Up to 30 points)
(b) Where applications requesting funds for more than one eligible Activity pursuant to Section 401 are permitted by the NOFA, each Activity will receive a separate score for each rating factor, and have an individual Activity total. It is possible that one Activity may score highly enough to receive an award, and the other Activity does not. (c) In the event of tied point scores and insufficient funding for both applications, the Department shall rank the tied applications as follows:
(1) If one of the tied applications is for an Affordable Rental Housing Development and the other is for a program Activity or development of a navigation center, the Department of Housing and Community Development 22 2019 PLHA Final Guidelines Affordable Rental Housing Development application will be selected for funding; (2) If one of the tied applications is for a navigation center and the other is for a program Activity, the navigation center will be selected for funding; (3) If both of the tied applications are for Affordable Rental Housing Developments, the Project with the lowest weighted average affordability of Restricted Units will be selected;
(4) If both of the tied applications are for navigation centers, the facility that provides overnight shelter to the greatest number of people will be selected; (5) If both of the tied applications are for programs, the Local government with the highest rate of households experiencing the most severe housing need according to the most recent HUD CHAS dataset will be selected.
(d) In the event there are insufficient funds to fulfill the entire funding request for the next highest scored application (Application A), the Department will determine whether Application A is feasible without the full funding request. If Application A is not feasible without full funding, the Department may offer the remaining funds to the application whose score is immediately below Application A. If the remaining funds are insufficient to fulfill the funding request for that application (Application B), the Department will again determine whether this application is feasible without the full funding request. If Application B is not feasible without the full funding request, the Department will perform the same analysis for the application whose score is immediately below Application B.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(i)(I)(ia) and subdivision (b)(2)(B)(ii)(V).

Section 404. Application Review
(a) Applicants must submit a complete application by the deadline stated in the NOFA in order to be eligible for funding. Application forms provided by the Department will be available upon release of the NOFA and will require Applicants to submit the forms and other documents to demonstrate that the Local government has met threshold requirements. The application will require submission of documentation adequate to demonstrate that the application has earned the appropriate number of points. (b) The Department may request additional information to complete its review, provided that the new information would not affect scoring.
(c) Applications recommended for funding are subject to conditions specified by the Department. Applicants will receive an official letter of award after the Department approves funding recommendations.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii).

Department of Housing and Community Development 23 2019 PLHA Final Guidelines Section 405. Deadlines and Funding Requirements
(a) Applicants will be required to enter into a state Standard Agreement (Standard Agreement) that will set forth conditions for funding and milestones that are required to be met.
(b) After the Standard Agreement and attachments have been finalized, the Local government will follow provided instructions for signing all required documents. The Local government must submit all supporting materials and a signed Standard Agreement within the timeline provided in the instructions or risk forfeiting the grant award.
(c) Except for predevelopment expenses for construction projects funded by PLHA and the costs to develop and prepare the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds.

Reimbursement of expenses to prepare the PLHA application is subject to the cap on administrative fees.
(d) Grant funds shall not be disbursed until:
(1) the Department authorizes loan closing, in the case of development projects; or (2) all general and special conditions have been complied with, in the case of other Activities.
(e) If funds are used for the development of an Affordable Rental Housing Development, the Local government shall make the PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement shall restrict occupancy and rents in accordance with the Department-approved underwriting of the project for at least 55 years.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(VI).

ARTICLE V. ADMINISTRATION
Section 500. Accounting Records
(a) The grantee shall establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the approved work plan, budget, and schedule. Separate bank accounts are not required. (b) The grantee shall maintain documentation of its financial records for expenditures incurred during the course of the PLHA Activity in accordance with generally accepted accounting principles. Such records shall be kept for at least five years after the close-out report is submitted to the Department.

Department of Housing and Community Development 24 2019 PLHA Final Guidelines (c) The Department or its designated representative shall have the right to review and copy any records and supporting documentation pertaining to the PLHA grant.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(III) and subdivision (b)(2)(B)(IV) and subdivision (b)(3).

Section 501. Audits/Monitoring of Project Files
(a) Grantee shall maintain PLHA files which, at a minimum, should include the following information and reports:
1) Project/Activity description
2) Land/site Information
3) Planning & zoning history (as appropriate)
4) Records of public hearings and public comments
5) Relocation needs (as appropriate)
6) Contracts, loan and grant agreements, Standard Agreement 7) Environmental records & reports/findings (as appropriate) 8) Design/engineering reports & plans (as appropriate)
9) Description of targeted beneficiaries, services to be provided, household incomes, special needs
10)PLHA Activity costs, invoices, purchase orders, sources and uses of funds for PLHA Activities, terms & conditions of financings, draws and all supporting documentation, change orders (as appropriate)
11)Activity schedule and amendments
12)History of Plan amendments
13)Procurement policy used for PLHA Activity(ies)
(b) The grantee shall maintain such records for possible audit for a minimum of three years after the close-out report is submitted, unless a longer period of records retention is stipulated in the Standard Agreement.
(c) The grantee shall be responsible for monitoring Rental Housing Developments that received PLHA funds for the term of the loan, including, but not limited to, the Projects’ compliance with the occupancy and rent requirements set forth in the Regulatory Agreement, compliance with reserve requirements, and the compliance with habitability standards.
(d) The grantee shall be responsible for monitoring AOWH loans to assure that the homes remain Owner-occupied.
(e) If requested by the Department, the grantee shall obtain a report from a qualified, Department of Housing and Community Development 25 2019 PLHA Final Guidelines licensed third party that certifies to the amounts of disbursement and identifies the specific Activities for which the disbursements were made. Such a report is permitted to be a component of the A-133 audit.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(IV) and subdivision (b)(3).

Section 502. Cancellation and Termination
(a) In the event that it is determined, at the sole discretion of the Department, that the grantee is not meeting the terms and conditions of the Standard Agreement, the Department shall issue a notice to stop work. Immediately upon receiving the written notice to stop work, the grantee shall cease all work under the Standard Agreement.

The Department has the sole discretion to determine the grantee’s compliance with the terms and conditions after issuance of a stop work order, and to deliver a written notice to the grantee to resume work under this Standard Agreement. (b) The Department shall terminate the Standard Agreement if the grantee is not in compliance with the Guidelines or the terms and conditions of the Standard Agreement. At least 30 days prior to the effective date of the termination of the Standard Agreement, the Department shall provide written notice to the grantee of its intent to cancel the funding allocation. The notice shall specify the reason for early termination and may permit the grantee or the Department to cure any deficiency(ies) prior to the early termination date. The grantee will submit requested documents to the Department within 30 days of the early termination notice. (c) Failure to meet reporting requirements will result in notice to the grantee that it must satisfactorily cure any deficiencies within three months of the notice or it will forfeit the following year’s PLHA formula allocation and be ineligible for a competitive award. The Local government will forfeit subsequent PLHA formula allocations and be ineligible for a competitive award until the Department determines that the Local government has met reporting requirements.
(d) The Department may, as it deems appropriate or necessary, request the repayment of funds from a Local government or offset future years’ funds, or pursue any other remedies available to it by law for failure to comply with the Guidelines and/or the terms and conditions of the Standard Agreement.
(e) Co-Applicants may be adversely impacted by a notice to stop work and/or termination if one grantee is deemed by the Department to not meet the terms and conditions of the Standard Agreement, or fails to meet the reporting requirements outlined in Section 503.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(IV) and subdivision (b)(3).

Department of Housing and Community Development 26 2019 PLHA Final Guidelines Section 503. Reporting
(a) The Department shall provide grantees with reporting formats and instructions. (b) Annual Reports are required from all grantees pursuant to HSC Section 50470(b)(2)(B)(ii)(III) each year by July 31 for the term of the Standard Agreement.

The Annual Report shall document the uses and expenditures of all awarded allocations and outcomes achieved. This report must be signed by both the Local government’s PLHA administrator and the Local government’s City Manager (or his/her designee), or Chief Executive Officer (or his/her designee) or Chief Financial Officer (or his/her designee). The Annual Report must describe any proposed amendment(s) to the approved Activity and schedule.
(c) Upon expenditure of all allocated funds and completion of the Activities funded by PLHA, the grantee shall submit a close-out report, which will be part of the Annual Report.
(d) The Department may request additional information as needed to meet other applicable reporting or audit requirements.

NOTE: Authority cited: HSC Section 50470, subdivision (d). Reference cited: HSC Section 50470, subdivision (b)(2)(B)(ii)(III) and subdivision (b)(2)(B)(ii)(IV).

Diana Malimon
12/09/2024
City of Crescent City
23-PIP-18478