San Francisco County Municipal Code Art. VI Financing Limitations

Sec. 40.17. Maximum Indebtedness on Property. Sec. 40.18. Maximum Amount of Loan. Sec. 40.19. Limitation Based on Fair Market Value of Work.

Outstanding loans on the property to be rehabilitated, including the amount of the loan for rehabilitation, shall not exceed 80 percent of the anticipated after-rehabilitation value of the property to be rehabilitated, as determined by the Chief Administrative Officer, except that the Chief Administrative Officer may authorize loans of up to 95 percent of the anticipated after-rehabilitation value of the property if: (a) Such loans are made for the purpose of rehabilitating the property for residential purpose; (b) There is demonstrated need for such higher limit; and (c) There is a high probability that the value of the property will not be impaired during the term of the loan. (Added by Ord. 482-80, App. 10/17/80)

The loan shall be made only for the purpose of meeting rehabilitation standards and the maximum amounts shall be as follows: Three units, $10,000 per unit; four or more units, $7,500 per unit; and guest rooms, as defined in Section 203.7 of the Housing Code, $2,500 per unit. The Chief Administrative Officer may approve a loan in excess of these amounts following guidelines established by the Chief Administrative Officer only where such excess financing will result in the creation of additional housing units by making habitable a multi-family building which has been abandoned or vacated for a period of one year prior to the date of application, or by the conversion of a multi-family building or portion thereof from commercial use to noncommercial use; provided, that in no case may the loan exceed $17,500 per unit for dwelling units and $11,500 per unit for guest rooms. (Added by Ord. 482-80, App. 10/17/80)

(a) Prior to granting of any loan over $20,000 under this Chapter, a qualified estimator hired by the borrower will make an on- premises inspection of the applicant's property and certify, in writing, the fair market value of the recommended work as detailed in the job specifications. (b) Where loan is under $20,000 and low bid exceeds estimate of building inspector by 10 percent, the borrower will hire a qualified estimator to certify, in writing, the fair market value of the work as detailed in the job specifications. (c) A qualified estimator is a person: (1) Who is not a City and County employee; but (2) Who is approved by the Chief Administrative Officer because he or she is qualified and experienced in the area of residential rehabilitation. The estimator shall operate under the direction of the Director of the Real Estate Department. (d) No loan will be granted in an amount exceeding 110 percent of the fair market value of the recommended work as specified in the job specifications as certified in writing by a qualified estimator, or higher than the lowest bid received, whichever is less, without the approval of the Chief Administrative Officer. (e) The Chief Administrative Officer shall, semi-annually, direct a report to the Board of Supervisors setting forth a list of the loans which were in excess of 110 percent of fair market value pursuant to the provisions of Subdivision (d) giving the reasons for approval in each case. (Added by Ord. 482-80, App. 10/17/80) ARTICLE VII:

TERMS OF LOANS Sec. 40.20. Maximum Repayment Period for Loan; Initiation of Payments after Rehabilitation. Sec. 40.21. Security for Loan. Sec. 40.22. Impound Account. Sec. 40.23. Transfer of Loans. Sec. 40.24. Interest Rates and Other Loan Charges. Sec. 40.25. Tenant Moving Costs and Right of First Refusal; Rent for Reoccupied Units. Sec. 40.26. Open Housing. Sec. 40.27. Equal Employment Opportunity. Sec. 40.28. Enforcement of Loan Provisions.

REHABILITATION. (a) The maximum repayment period for a HELP loan shall be 20 years or three-fourths of the economic life of the property, whichever is less. (b) Subject to budgetary and fiscal limitations, and approval of the Chief Administrative Officer, payments on a HELP loan may 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. 482-80, App. 10/17/80)

Unless provided otherwise in any bond resolution issued pursuant to the provisions of this Chapter, every HELP loan shall be secured by a deed of trust naming the City and County as beneficiary of the trust. (Added by Ord. 482-80, App. 10/17/80)

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 HELP loan agreement. (Added by Ord. 482-80, App. 10/17/80)

(a) The unpaid amount of a HELP 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 HELP 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 HELP 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 HELP 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. 482-80, App. 10/17/80)

The interest rate and any other charges to the borrower for a HELP loan shall be established pursuant to the provisions of Sections 40.5 and 40.11, 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 issuing loans; (d) An amount to cover the cost of servicing loan accounts; (e) An amount to cover the costs of issuing bonds; (f) An amount to cover the costs of the administration of the loans including, but not limited to, loan officer services, title report, and credit report. (Added by Ord. 482-80, App. 10/17/80)

UNITS. (a) Every loan application for the HELP program shall report the current rents of each unit in the building for which assistance is sought. (b) In the case of dwelling units which the Superintendent of the Bureau of Building Inspection certifies as dwelling units which must be vacated because of residential rehabilitation to be performed on the structure where they are located with assistance from the HELP program: (1) The property owner is responsible for paying the reasonable cost of moving expenses only of each low and moderate income household displaced from such a unit; maximum moving expense shall not be in excess of $500; (2) Any tenant who must vacate such a dwelling unit shall have the right of first refusal to occupy that unit when rehabilitation of the property is completed; (3) Notwithstanding any other provisions of the San Francisco Rent Stabilization and Arbitration Ordinance, or any rules or regulations promulgated in accordance with that ordinance, and notwithstanding the provisions of any successor ordinance or law regulating rent increases which is in effect at the time the HELP loan is made, the rent charged to any tenant who next occupies such a unit following rehabilitation may not exceed the rent which could be charged a reoccupying tenant under the terms of such ordinance or law in effect at the time the HELP loan is made (the prior rent adjusted in accordance with Section 37.9(a)(11) of Chapter 37 of the San Francisco Administrative Code or comparable provisions of the ordinance in effect at the time the HELP loan is made). For purposes of Section 37.9(a)(11) the rehabilitation cost which is permitted to be passed on as a rent increase to any tenant who chooses to occupy a dwelling unit after rehabilitation of the property has been completed shall be amortized over the original amortization period of the HELP loan. (4) The property owner shall give each tenant living in such a unit written notice, 30 days prior to the date the tenant must vacate, of

the right to have no more than $500 of the reasonable cost of moving the household paid, if the household qualifies as a low and moderate income household, and of the right to first refusal to reoccupy the unit at the prior rent adjusted in accordance with Section 37.9(a)(11) of Chapter 37 of the San Francisco Administrative Code, or successor provision, as modified in clause (3) above. A copy of the notice specified in clause (3) shall be forwarded to the Chief Administrative Officer. (c) The requirements of Subdivision (b) shall be included in the terms of each HELP loan agreement. (d) The anticipated cost of moving households affected by residential rehabilitation may be included in the property owner's loan. (e) The determinations of qualification as a low and moderate income household and of the amount of moving expenses due a tenant shall be made by the Central Relocation Service of the Mayor's Office using the standard schedule for such computation. (Added by Ord. 482-80, App. 10/17/80)

All HELP 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, sex, marital status, color, religion, national origin or ancestry. (Added by Ord. 482-80, App. 10/17/80)

All HELP loan agreements shall provide that all contracts and subcontracts let for residential rehabilitation financed under this Chapter are to be let without regard to the race, sex, marital status, color, religion, national origin or ancestry of the contractor or subcontractor. Further, all HELP loan agreements shall provide that any contractor or subcontractor engaged in residential rehabilitation financed under this Chapter must agree to provide equal opportunity for employment without regard to race, sex, marital status, color, religion, national origin or ancestry. (Added by Ord. 482-80, App. 10/17/80)

The provisions of Section 40.26 and the provisions of Section 40.27 as 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. (Added by Ord. 482-80, App. 10/17/80)