(a)  The Homeownership Assistance Fund is hereby created in the State Treasury and, notwithstanding Section 13340 of the Government Code, is continually appropriated to the department for purposes of this chapter, including Section 50775.5, and for the purposes of Section 50745.1. Any moneys received by the department pursuant to this chapter shall be deposited in such fund. All interest or other increment resulting from investment or deposit of moneys in the fund shall be deposited in the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provisions of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.

(b)  Not less than 50 percent of the moneys in the fund shall be used to assist lower income households. Not less than 20 percent of the units assisted shall be in rural areas.

(c)  Funds available for the purpose of this chapter shall be allocated by the department throughout the state in accordance with identified housing needs.

(d)  (1)  Notwithstanding any other provision of law, commencing on July 1, 1992, the department shall not be required to make loans pursuant to this chapter.

(2)  The department may retain within the fund moneys necessary for administration and monitoring of loans made prior to July 1, 1992, to make loans pursuant to loan commitments made prior to July 1, 1992. The department may also retain reserves for curing or averting a default that would jeopardize any security interest of the department.

(3)  Notwithstanding any other provision of law, on or after July 1, 1996, the unencumbered fund balance and reserves shall be transferred to the Housing Rehabilitation Loan Fund. Subsequent income and resources shall be deposited to the Housing Rehabilitation Loan Fund.

(Amended by Stats. 1996, Ch. 201, Sec. 22. Effective July 22, 1996.)