1. (a) Projects shall not be eligible for an award of funds unless the application demonstrates that all of the following conditions exist:

   1. (1) The applicant is an eligible Sponsor pursuant to Section 7303;
   2. (2) The Project involves an eligible Project pursuant to Section 7302;
   3. (3) All proposed uses of Program funds are eligible pursuant to Section 7304;
   4. (4) The application is complete pursuant to Section 7318;
   5. (5) The Project will maintain Fiscal Integrity consistent with proposed Rents in the Assisted Units and is feasible pursuant to Section 8310 of this title;
   6. (6) The Project site is free from severe adverse environmental conditions, such as the presence of toxic waste that is economically infeasible to remove and that cannot be mitigated;
   7. (7) The Project site is reasonably accessible to public transportation, shopping, medical services, recreation, schools, and employment in relation to the needs of the Project tenants;
   8. (8) In Projects targeting Special Needs Populations, the Project will provide services suitable to the needs of the tenants, and the application demonstrates a specific, feasible plan for delivery and funding of those services including identification of service partners and funding sources; and
   9. (9) The Project complies with the requirements of Sections 8302 and 8303 of this title.

2. (b) Applications shall be reviewed by the Department to determine compliance with subsection (a), above, and shall be rated and ranked in accordance with this subsection (b). Applications shall be ranked in the order of their point scores. The Department may establish a preliminary point score and ranking for applications prior to determining their compliance with subsection (a), above. If an application will not be within a fundable range as indicated by the preliminary ranking, the Department is not required to determine the application's compliance with subsection (a), above. Additional or alternative scoring may be implemented in particular NOFA's for designated Project types as described above in Section 7317(c).

   1. (1) The extent to which the Project serves households at the lowest income levels -- 35 points maximum.

      1. (A) 0.75 points will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes less than or equal to 40% of State Median Income, expressed as a percentage of Area Median Income.
      2. (B) 1 point will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes less than or equal to 35% of State Median Income, expressed as a percentage of Area Median Income.

      3. (C) 1.5 points will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes not exceeding 20% of State Median Income (adjusted by the Department to avoid exclusion of working CalWORKs recipients and individuals receiving SSI and expressed as a percentage of Area Median Income) for the first 10% of total Restricted Units; then 1 point for each subsequent percent of total Restricted Units.

         Point scores will be rounded to the nearest one hundredth point in this category.

         Other Areas

      4. (D) .75 points will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes less than or equal to 35% of State Median Income, expressed as a percentage of Area Median Income.
      5. (E) 1 point will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes less than or equal to 30% of State Median Income, expressed as a percentage of Area Median Income.

      6. (F) 1.5 points will be awarded for each percent of Restricted Units that are Restricted Units for households with incomes not exceeding 20% of State Median Income (adjusted by the Department to avoid exclusion of working CalWORKs recipients and individuals receiving SSI and expressed as a percentage of Area Median Income) for the first 10% of total Restricted Units; then 1 point for each subsequent percent of total Restricted Units.

         In Projects that rely on renewable Project-based rental assistance contracts to maintain Fiscal Integrity consistent with the targeted income limits (and associated tenant Rents), scores will be based on the income limits and Rents applicable under the rent subsidy contract.

         Point scores will be rounded to the nearest one hundredth point in this category.

      Applications will be scored based on the percentage of Restricted Units limited to various percentages of the State Median Income, expressed as a percentage of Area Median Income and adjusted by household size, and in accordance with the following schedules:

      High Income Areas

      For purposes of this subchapter, “high income areas” means counties with Area Median Incomes that exceed 110% of the State Median Income.

   2. (2) The extent to which the Project addresses the most serious identified local housing needs -- 15 points maximum.

      1. (A) 5 points will be awarded based on the receipt of:

         1. 1. a letter from the local housing agency, or city, or county in which the proposed Project will be located, stating that the proposed Project will address a serious local housing need as identified in a specific local policy document; or
         2. 2. for Projects with a minimum of 70% of Project Units reserved for Special Needs Populations, a letter from a local government entity responsible for delivery of Special Needs Populations' services, stating that the proposed Project will address a serious local housing need related to Special Needs Populations served by the Project.

      2. (B) Projects will receive 10 additional points if:

         1. 1. at least 70% of the total Units are reserved for Special Needs Populations; or
         2. 2. at least 70% of the total Units have 2 or more bedrooms, and they are located in one of the following counties: San Diego, Orange, Los Angeles, Ventura, Santa Barbara, San Luis Obispo, Monterey, Santa Cruz, San Mateo, Santa Clara, San Francisco, Alameda, Contra Costa, Napa, Solano, Marin or Sonoma.

      3. (C) For Projects not meeting the requirements of subsection (b)(2)(B), above, up to 10 points will be awarded on the basis of vacancy rate comparisons with competitive developments as described in subparagraph (3), below. (For purposes of the following vacancy rate comparison, Units reserved for Special Needs Populations in the proposed Project and competitive Projects shall not be considered.)

         1. 1. Competitive developments are multifamily rental developments with Units similar to those in the Project, which are not severely dilapidated, are not being purposely held vacant or partially vacant, and are not affected by some other unique situation that is artificially depressing occupancy levels. If the proposed Project is for the elderly, competitive Projects must be limited to this population;
         2. 2. Units similar to those in the Project are defined as Units with the same number of bedrooms and bathrooms. Where the proposed Project contains 3 or 4 bedroom Units and where 3 or 4 bedroom multifamily rental developments do not exist in the market area of the proposed Project, competitive developments will be those multifamily rental developments containing the largest Units in the market area of the proposed Project while meeting the requirements of subparagraph (1.), above;

         3. 3. Points will be awarded on the basis of either the weighted average vacancy rate, as documented by the Sponsor, of 5 or more competitive developments, nearest the proposed Project, or the vacancy rate for competitive Projects as determined by a market study, performed by a qualified third party in accordance with the Department's application of TCAC Market Study Guidelines dated February 2002 except that market studies for proposed elderly Projects shall be limited to competitive elderly developments as follows:

            1. (i) 10 points will be awarded if the vacancy rate is lower than 3%.
            2. (ii) 5 points will be awarded if the vacancy rate is at least 3% but less than or equal to 5%.

   3. (3) The development and ownership experience of the Project Sponsor -- 20 points maximum.

      1. (A) Applications will be scored based on the number of subsidized Rental Housing Developments (including tax credit Projects) that the Sponsor has completed over the last 5 years and whether they have identified performance problems.
      2. (B) A Sponsor may include the experience of its affiliated entities or its principals (e.g., employees responsible for managing development activities), but not the experience of non-management board members. A Sponsor may include the experience of a partner in order to gain experience points; however, the experienced partner must have a controlling interest in the partnership and a substantial and continued role in the Project's ongoing operations, as evidenced in partnership documents. In such cases, points will be awarded based only on the experience of the more experienced partner. Any dissolution of the partnership or withdrawal of the more experienced partner will require prior written approval by the Department.
      3. (C) To be counted towards experience pursuant to subsection (b)(3), above, completed Projects cited for experience points must contain 10 or more Units, except if the proposed Project contains less than 15 Units and at least 70% of the total Units in the proposed Project are reserved for Special Needs Populations, completed Projects submitted for experience points must contain at least 5 Units.
      4. (D) 4 points will be awarded for each Project completed in the 5 years preceding the application due date, up to a maximum of 20 points.

      5. (E) Where at least 70% of the Units in the proposed Project are reserved for Special Needs Populations, the Sponsor may elect to have its application scored based on the lesser of:

         1. 1. The number of subsidized Rental Housing Developments that the Sponsor's development consultant or contracted developer has completed in the last five years;

         2. 2. The number of subsidized Rental Housing Developments that the Sponsor, or affiliates or principals of the Sponsor either own or operate under a long-term lease or other arrangement that involves all responsibilities commensurate with ownership.

            To qualify for scoring under this alternative, the Sponsor must contract with the developer or development consultant for comprehensive development services, including financial packaging, selection of other consultants, selection of the construction contractor and property management agent, oversight of architectural design, construction management, and other major aspects of the development process.

            Applications scored under this alternative shall be awarded 4 points per Rental Housing Development, up to a maximum of 20 points.

      6. (F) 5 points will be deducted for each occurrence or event in the following categories, with a maximum deduction of 10 points per category and a maximum total deduction of 50 points:

         1. 1. removal or withdrawal under threat of removal as general partner;
         2. 2. failure to submit, when due, compliance documentation required under the Department Program;
         3. 3. use of reserve funds for Department-assisted Projects in a manner contrary to Program requirements, or failure to deposit reserve funds as required by the Department;
         4. 4. failure to provide promised supportive services to a Special Needs Population or other tenants of a publicly funded Project;

         5. 5. other significant violations of the requirements of Department programs or of the programs of other public agencies, such as the failure to adequately maintain a Project or the books and records thereof.

            Events occurring in connection with Projects under the control of the Sponsor shall be used as the basis for point deductions. Such events shall have had a detrimental effect on the Project or the Department's ability to monitor the Project, as determined by the Department. Events shall not result in the deduction of points if they have been fully resolved as determined by, or to the satisfaction of, the Department as of the application due date.

   4. (4) The percentage of Units for families or Special Needs Populations and “at-risk” Rental Housing Developments -- 35 points maximum.

      1. (A) .2 points will be awarded for each percent of total Project Units that have 2 bedrooms.
      2. (B) .7 points will be awarded for each percent of total Project Units that have 3 or more bedrooms.
      3. (C) 1 point will be awarded for each percent of total Project Units that are reserved for a Special Needs Population or Populations.

      4. (D) Projects approved by the Department as “at-risk”, as defined by TCAC Regulations, will receive 35 points in this category.

         Point scores will be rounded to the nearest one hundredth point in this category.

      Applications will be scored based on the percentage of Project Units that will have 2 or more bedrooms, or that are reserved for Special Needs Populations. Projects must have at least 5 Units reserved for Special Needs Populations to receive points for Special Needs Populations' Units. To receive points for Special Needs Populations' Units, a complete and detailed supportive services plan acceptable to the Department, describing services appropriate to the needs of the targeted population, a line item budget, and documentation identifying proposed funding sources must accompany the application, along with detailed documentation acceptable to the Department describing the experience and capacity of the services provider.

   5. (5) Leverage of other funds, in those jurisdictions where they are available -- 20 points maximum.

      Applications will be scored based on the leverage of other funds, meaning the amount of non-Program funds for permanent funding of the development costs attributable to the Restricted Units, as a percentage of the requested amount of Program funds. Deferred developer fees will not be counted as leveraged funds. Land donations will be counted as leveraged funds where the value is established with a current appraisal. One-half point will be awarded for each full 5-percentage point increment above 100%. Rural Area Projects will be awarded one-half point for each full 5-percentage point increment above 50%. For example, a non-Rural Area Project where other funds are equal to 100% of requested Program funds will receive zero (0) points, a Project where other funds equal 150% will receive 5 points, a Project where other funds equal 250% will receive 15 points, and a Project where non-Program funds equal 300% of requested Program funds will receive the maximum 20 points.

   6. (6) Project Readiness -- 15 points maximum.

      1. (A) 2.5 points will be awarded to Projects for each of the following circumstances as documented in the application. If a particular category is not applicable, full points shall be awarded in that category.

         1. 1. obtaining enforceable commitments for all construction financing, not including tax-exempt bonds, 4% tax credits, and funding to be provided by another Department program. Funds from other Department programs proposed for construction financing for the Project must be awarded prior to final rating and ranking for the MHP application;
         2. 2. completion of all necessary environmental clearances (California Environmental Quality Act and National Environmental Policy Act) and of a Phase I Environmental Site Assessment;
         3. 3. obtaining all necessary and discretionary public land use approvals except building permits and other ministerial approvals;

         4. 4. either:

            1. (a) the Sponsor has fee title ownership to the site or a long-term leasehold securing the site meeting the criteria for Program site control; or
            2. (b) the Sponsor can demonstrate that the working drawings are at least 50% complete, as certified by the Project architect;
         5. 5. obtaining local design review approval to the extent such approval is required;
         6. 6. obtaining commitments for all deferred-payment financing, grants and subsidies, in accordance with TCAC requirements and with the same exceptions as allowed by TCAC. Deferred-payment financing, grant funds and subsidies from other Department programs proposed for Project financing must be awarded prior to final rating and ranking for the MHP application.

   7. (7) Adaptive Reuse/Infill/Proximity to Amenities -- 10 points maximum.

      1. (A) Adaptive reuse. The Project will be located in a developed area served with public infrastructure and shall consist of the rehabilitation of vacant or underused commercial or industrial buildings.
      2. (B) Infill development. The Project will be located in a developed area.
      3. (C) Proximity to amenities. The Project will be proximate to public transit, public schools, public parks, or public recreational facilities, as determined by TCAC regulations that would result in TCAC scoring points given thereto; or the Project will be located within one mile of a Job Center. A Job Center is a concentration of employment opportunities reasonably available to the tenants of the Project.

      The following criteria shall apply only to applications requesting funds appropriated pursuant to Section 53533(a)(1) of the Health and Safety Code.

      Applications will receive 10 points for meeting any of the following three conditions. Applications not meeting any one of these three conditions will not receive points pursuant to this criterion.

   The following criteria shall be used to rate applications:

3. (c) In the event of tied point scores, the Department shall rank tied applications based on the lowest weighted average affordability of Restricted Units, which shall be computed as follows:

   1. (1) Multiplying each income limit applicable to the Project by the number of Units restricted at that income level.
   2. (2) Adding the products calculated pursuant to the previous subsection.
   3. (3) Dividing the sum calculated pursuant to the previous subsection by the number of Restricted Units in the Project.

Note: Authority cited: Sections 50406(n), 50675.1(c) and 50675.11, Health and Safety Code. Reference: Sections 50675.4, 50675.5, 50675.6 and 50675.7, Health and Safety Code.

History

1. New section filed 1-8-2002; operative 1-8-2002 pursuant to Government Code section 11343.4 (Register 2002, No. 2).

2. Amendment filed 9-29-2003; operative 9-29-2003 pursuant to Government Code section 11343.4 (Register 2003, No. 40).