(b) To the minimum extent necessary to support new debt to pay for rehabilitation, but not for extraction of equity, rents for assisted units in these developments may be adjusted pursuant to the department guidelines and Section 42 of the Internal Revenue Code. This rehabilitation shall be determined by the department to be demonstrably necessary, based on third-party assessment and on the department’s own inspection, if the department deems an inspection necessary. Assisted units in developments with a specific, department-approved plan to undertake the necessary rehabilitation, at a level that equals or exceeds the minimum per-unit rehabilitation cost standards under the low-income housing tax credit program, may be adjusted as follows:

1. (1) For developments originally financed under the bond-funded component of the Rental Housing Construction Program pursuant to Section 50771.1, and the Family Housing Demonstration Program, rents may be increased up to a maximum of 30 percent of 60 percent of area median income, for units designated in the development’s original regulatory agreement as lower income units, and up to a maximum of 30 percent of 35 percent of area median income, for units designated in the development’s original regulatory agreement as very low income units.
2. (2) For developments originally financed under other programs that calculate income levels and rent limits consistent with the calculation methodology used under the low-income housing tax credit program and the Multifamily Housing Program, the income and rent limits under those programs shall be preserved in accordance with the applicable requirements of those programs, and rent increases shall be subject to the applicable requirements of those programs, all to the extent that the income, rent, and rent increase requirements continue to apply to the developments under those programs.

3. (3) Developments originally financed under other programs that require formula-based rents for at least 35 percent of the assisted units, or as specified in the original regulatory agreement governing the development, whichever is greater, shall be restricted to the midlevel target used by the Multifamily Housing Program. Rents for the balance of the assisted units may be increased up to a maximum of 30 percent of 60 percent of area median income. For purposes of this paragraph, “midlevel target used by the Multifamily Housing Program” shall mean either of the following:

   1. (A) For counties with an area median income of 110 percent or less of state median income, it shall mean 30 percent of 30 percent of state median income, expressed as a percentage of area median income.
   2. (B) For counties with an area median income that exceeds 110 percent of the state median income, it shall mean 30 percent of 35 percent of state median income, expressed as a percentage of area median income.

(c) Rent increases for tenants living in assisted units at the time of restructuring pursuant to this chapter shall be limited as follows:

1. (1) For existing tenants with incomes not exceeding 35 percent of area median income, increases shall be limited to 5 percent per year, until the rents reach the levels set under subdivision (b).
2. (2) For existing tenants with incomes exceeding 35 percent of area median income, increases shall be limited to 10 percent per year, until they reach the levels specified in paragraphs (1) and (2) of subdivision (b) of Section 50561.
3. (3) It is the intent of the Legislature that rent increases for existing tenants authorized by this subdivision shall not be greater than necessary to ensure the financial feasibility of the project. The projected maximum rent for tenants in assisted units, as determined by subdivision (b), shall not exceed 50 percent of the household’s actual income. This requirement shall be applied using maximum rent levels and household incomes determined at the time of restructuring or at the time of the department’s approval of the restructuring.

4. (4) If the refinance of a loan results in a rent increase, the project sponsor shall provide tenants with the following notifications:

   1. (A) Notice six months before the scheduled rent increase with an estimate of the amount of the increase.
   2. (B) Notice 90 days before the actual increase with the exact amount of the new rent.

(g) The guidelines adopted by the department pursuant to subdivision (h) of Section 50560 shall be patterned after the regulations governing the Multifamily Housing Program, including the Uniform Multifamily Regulations, except that the department may adopt different standards for the following factors:

1. (1) Commercial vacancy loss assumptions must reflect project operating history.
2. (2) Debt service coverage ratios.
3. (3) Payment terms and principal amount of senior debt, considering financial market conditions, including costs and department risk, as determined by the department.
4. (4) Developer fee limitations shall be consistent with California Tax Credit Allocation Committee regulations for inclusion in the basis for projects receiving 9 percent tax credits, for projects receiving the special rent increases contemplated by this chapter, and, consistent with the requirements of other funding sources, for projects not receiving special rent increases, but developer fees shall not exceed the amount allowed by the California Tax Credit Allocation Committee regulations for projects receiving 9 or 4 percent tax credits, as applicable, and shall not exceed 25 percent of actual rehabilitation costs where there is no tax credit resyndication. Developer fees shall only be payable in the event of a resyndication involving major rehabilitation, as defined by the California Tax Credit Allocation Committee in regulations.
5. (5) Replacement reserve deposit amounts must be based on projected costs over 20 years, adjusted for inflation, and as shown in an independent replacement reserve analysis.

(i)

1. (1) The department shall, within available resources, post on its internet website information regarding household incomes and rents for developments approved for restructuring.
2. (2) The information shall be provided within six months of a restructuring and, thereafter, no less than every three years.

3. (3) The information shall include the following or similar information:

   1. (A) The monthly rent of each household at the time of restructuring.
   2. (B) The current monthly rent of each household.
   3. (C) The annual income of each household as a percentage of area median income at the time of restructuring.
   4. (D) The current income of each household as a percentage of area median income.