Cal. Health & Safety Code § 50675.4

(a) To be eligible to receive a loan, a proposed project shall involve one or more of the following activities:
1. (1) The development and construction of a new transitional or rental housing development.
2. (2) The rehabilitation, or acquisition and rehabilitation, of a transitional or rental housing development.
3. (3) The conversion of a nonresidential structure to a transitional or rental housing development.
(b) In the case of rehabilitation projects, to be eligible to receive a loan, the loan shall be necessary to avoid increases in monthly debt service that have either of the following effects:
1. (1) Result in rent increases causing permanent displacement of persons of lower income residing in the development prior to rehabilitation.
2. (2) Make it economically infeasible to accept subsidies available to provide affordable rents to persons of lower income, if the sponsor agrees to accept the subsidies.
(c) To be eligible to receive a loan, the sponsor shall agree to both of the following:
1. (1) To set and maintain affordable rent levels for assisted units.
2. (2) To the payment of prevailing wage rates with respect to construction assisted through the program. In implementing this paragraph, it is the intent of the Legislature that this requirement apply to construction work that is dependent on the commitment of program funds in order for construction to proceed. Notwithstanding any other provision of law, the department’s enforcement responsibilities shall be limited to the imposition of this requirement through the lending documents. The department shall require, as a condition of loan closing, a signed certificate that prevailing wages have been, or will be, paid in conformance with the requirements of Chapter 1 (commencing with Section 1720) of Part 7 of the Labor Code and that labor records shall be made available to any enforcement agency upon request. The requirements of this paragraph shall not apply to projects for which program funds are used exclusively to achieve lower rents and to pay associated administrative costs.