(a) The Orange County Development Agency may use the funds described in Section 33334.2 anywhere within the unincorporated territory, or within the incorporated limits of any city within the County of Orange. The agency may only use these funds outside the project area upon a resolution of the agency and board of supervisors determining that the use will be of benefit to the project area. In addition, the agency may use these funds within the incorporated limits of a city only if the agency and the board of supervisors find all of the following:

1. (1) Both the County of Orange and the city have adopted and are implementing complete and current housing elements of their general plans that the department has determined to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
2. (2) The development to be funded shall not result in any residential displacement from the site where the development is to be built.
3. (3) The development to be funded shall be a rental housing development containing units affordable to lower income households or very low income households, as defined in Sections 50079.5 and 50105.
4. (4) The development is in an area with a need for additional affordable housing.
5. (5) If applicable, Article XXXIV of the California Constitution permits the development.
6. (6) The city in which the development is to be constructed has certified to the agency that the city’s redevelopment agency, if one exists, is not subject to sanctions pursuant to subdivision (e) of Section 33334.12 for failure to expend or encumber a housing fund excess surplus.

(b) If the agency uses these funds within the incorporated limits of a city, all of the following requirements shall apply:

1. (1) The funds shall be used only for the acquisition of land for, and the design and construction of, housing containing units affordable to lower income households or very low income households, as defined in Sections 50079.5 and 50105, or for the acquisition or rehabilitation of publicly assisted rental housing that is threatened with conversion to market rates.
2. (2) If less than all the units in the development are affordable to lower income households or very low income households, any agency assistance shall not exceed the amount needed to make the housing affordable to lower income households and very low income households.
3. (3) The units in the development that are affordable to lower income households or very low income households shall remain affordable for a period of at least 55 years. Compliance with this requirement shall be ensured by the execution and recordation of covenants and restrictions that, notwithstanding any other provision of law, shall run with the land.
4. (4) No development shall be located in a census tract where more than 50 percent of its population is very low income.
5. (5) Assisted developments shall be located on sites suitable for multifamily housing near public transportation.
6. (6) Developed units shall not be treated as meeting the regional housing needs allocation under both the city’s and county’s housing elements.
7. (7) The funds shall be used only for developments for which the city in which the development will be constructed has approved the agency’s use of funds for the development or has granted land use approvals for the development.
8. (8) The aggregate number of units assisted by the county over each five-year period shall include at least 10 percent that are affordable to households earning 30 percent or less of the area median income, and at least 40 percent that are affordable to very low income households.