San Francisco County Municipal Code Art. VII Terms of Conventional Rap Loans

Sec. 32.60. Eligibility for Loans. Sec. 32.61. Maximum Repayment Period for Loan; Initiation of Payments After Rehabilitation. Sec. 32.62. Prepayment Penalties. Sec. 32.63. Security for Loan. Sec. 32.64. Insurance. Sec. 32.65. Impound Account. Sec. 32.66. Transfer of Loans. Sec. 32.67. Interest Rates and Other Loan Charges. Sec. 32.68. Variable Interest Rate. Sec. 32.69. Tenant Moving Costs and Right of First Refusal. Sec. 32.70. Open Housing. Sec. 32.71. Equal Employment Opportunity. Sec. 32.71-1. Performance of Work by Licensed General Building Contractor. Sec. 32.72. Enforcement of Loan Provisions. Sec. 32.73. Rent Increase Limitations for Areas Designated Prior to July 1, 1977. Sec. 32.73-1. Rent Increase Limitations for Areas Designated on or After July 1, 1977. Sec. 32.74. Rent Increase Protest Procedures. Sec. 32.75. Sanctions for Violation of Rent Increase Limitations. Sec. 32.75-1. Evictions.

(a) Each owner of property located within a residential rehabilitation area is eligible for a conventional RAP loan, provided the owner demonstrates to the satisfaction of the Chief Administrative Officer the ability to repay such a loan; applies for the loan within a time period to be designated by the Chief Administrative Officer; and can meet the other requirements of this Chapter. The property owner shall agree to all conditions of the loan agreement as a prerequisite to obtaining a loan. No elective officer of the state or any of its subdivisions shall be eligible to receive a loan under the provisions of this Chapter. (b) Any owner who is denied a loan by the Chief Administrative Officer on the grounds that the owner does not meet eligibility requirements may appeal the decision to the Loan Committee. The Loan Committee shall review the application for a loan and make a recommendation regarding approval or denial to the Chief Administrative Officer. In reviewing the application, the Loan Committee shall give due consideration to the need for the loan to be made in order to accomplish the purposes of the program, the risks to the City and County of granting the loan, and the ability of the property to support the loan as well as to the reasons for denial of the application by the Chief Administrative Officer. If the Chief Administrative Officer does not accept the recommendations of the Loan Committee, he or she shall give written reasons for the refusal to approve the loan. (Added by Ord. 23-74, App. 1/9/74)

REHABILITATION. (a) The maximum repayment period for a conventional RAP loan shall be 20 years or ¾ of the economic life of the property, whichever is less.

(b) Subject to budgetary and fiscal limitations, payments on a conventional RAP loan shall not be required to commence prior to completion of the improvements for which such loan is made; provided that payments shall begin no later than six months after an initial disbursement from proceeds of the loan. The monthly payment due under the loan shall be adjusted to insure repayment of the principal and interest due on the loan within the time required by paragraph (a) of this Section. (Added by Ord. 23-74, App. 1/9/74)

There shall be no penalty assessed for prepayment of any conventional RAP loan. (Added by Ord. 23-74, App. 1/9/74)

Unless provided otherwise in any bond resolution issued pursuant to the provisions of this Chapter, every conventional RAP loan shall be secured by a deed of trust naming the City and County as beneficiary of the trust. (Added by Ord. 23-74, App. 1/9/74)

All conventional RAP loan agreements shall provide that so long as the loan or any portion of it is outstanding, the owner of the property subject to the loan shall carry adequate property insurance. The Chief Administrative Officer shall establish standards for determining when property insurance is adequate. (Added by Ord. 23-74, App. 1/9/74)

If the Chief Administrative Officer deems it desirable and necessary to effectuate the purposes of the program that an impound account be required to assure taxes, insurance, or a maintenance reserve, he or she may include such a requirement in any conventional RAP loan agreement. (Added by Ord. 23-74, App. 1/9/74)

(a) The unpaid amount of a conventional RAP loan shall be due and payable upon sale or transfer of the ownership of the property, except that assignment of the unpaid amount of such a loan to a purchaser or transferee may be permitted when the Chief Administrative Officer determines that hardship conditions exist and the prospective owner qualifies for a loan on the basis of current loan eligibility standards. (b) If the holder of a conventional RAP loan is dissatisfied with the Chief Administrative Officer's refusal to permit transfer of the unpaid amount of the loan because of a finding that hardship conditions do not exist, the holder of the loan may request review of the Chief Administrative Officer's determination by the Loan Committee. If the Loan Committee recommends a finding that hardship conditions exist, the Chief Administrative Officer shall either accept that recommendation or give written reasons for the refusal to accept it. (c) Hardship conditions exist: (1) When the owner of property subject to a conventional RAP loan is forced to sell the property and the property cannot be sold without a substantial loss of equity unless the loan is transferable;

(2) When the income of a prospective purchaser of property subject to a conventional RAP loan is at or below income standards to be established by the Chief Administrative Officer; or (3) When the prospective purchaser is unable to obtain financing in the private sector because of age, disability or sex; or (4) When transfer of the loan is necessary to prevent significant rent increases. (d) The Chief Administrative Officer shall develop standards which shall be applied in making determinations required under this Section. (Added by Ord. 23-74, App. 1/9/74)

The interest rate and any other charges for a conventional RAP loan shall be established pursuant to the provisions of Sections 32.13 and 32.23, and may include: (a) The interest charged the City and County on funds borrowed to carry out the provisions of this Chapter; (b) An amount needed to provide for possible defaults on outstanding loans; (c) An amount to cover the cost of servicing loan accounts; (d) An amount to cover the cost of making hardship loans (as provided for in Article VIII); and (e) An amount to cover the costs of issuing bonds. (Added by Ord. 23-74, App. 1/9/74)

In connection with a conventional RAP loan, the loan agreement may provide for a variable interest rate. If the loan agreement does provide for a variable interest rate, the terms of the loan agreement and any change in the interest rate or other charges shall conform to the requirements of Sections 37917 of the Health and Safety Code of the State of California relating to the use of variable interest rates in connection with financing residential rehabilitation. (Added by Ord. 23-74, App. 1/9/74)

All conventional RAP loan agreements shall provide that, in the case of dwelling units which must be vacated because of residential rehabilitation to be performed on the structures where they are located: (a) A tenant who must vacate a dwelling unit shall have the right of first refusal to occupy that unit at a rent adjusted in accordance with the San Francisco Administrative Code when rehabilitation of the property is completed; (b) The property owner shall give each tenant affected written notice 30 days prior to the date the tenant must vacate of the following: (1) That the tenant has the right to first refusal to reoccupy the unit vacated when rehabilitation of the property is completed; (2) That relocation assistance may be available and that relocation information may be obtained from the Chief Administrative Officer, Room 289, City Hall, San Francisco; and (3) That the tenant may be subject to certain protections under the Rent Ordinance and that information concerning such protection is available from the Rent Board, 170 Fell Street, Room 16, San Francisco. (c) A copy of the notice specified in clause (b) shall be forwarded to the Rent Board. (Amended by Ord. 112-83, App. 3/11/83)

All conventional RAP loan agreements shall provide that so long as the loan or any portion of it is outstanding the property shall be open upon sale or rental of all or any portion thereof, to all persons regardless of race, color, religion, national origin or ancestry. (Added by Ord. 23-74, App. 1/9/74)

The provisions of Section 32.70 and the provisions of Section 32.71 is they relate to enforcement of nondiscrimination on the basis of race, sex, marital status, color, religion, national origin or ancestry, are enforceable by the Human Rights Commission. The enforcement powers, responsibilities and procedures of the Human Rights Commission set forth in Chapter 12A of the San Francisco Administrative Code and Article 131 of the San Francisco Labor and Employment Code shall be applicable to carry out the Commission’s responsibilities under this Chapter. In addition, pursuant to rules to be adopted by the Chief Administrative Officer, violation of the loan agreement provisions required by Sections 32.69, 32.70, and 32.71 may result in any outstanding financing obtained pursuant to the loan agreement becoming immediately due and payable. (Added by Ord. 23-74, App. 1/9/74)

When a tenant believes that the rent for his or her dwelling unit has been increased above the amounts allowed under Section 32.73, or increased in excess of the limitations set forth in the Rent Ordinance (Chapter 37 of the San Francisco Administrative Code), the tenant may petition the Rent Board for a rental arbitration hearing. (Amended by Ord. 269-82, App. 6/10/82)