(a) The department may make development loans from the Mobilehome Park Rehabilitation and Purchase Fund to a qualified nonprofit housing sponsor, resident organization, or a local public entity for the acquisition and construction of a new mobilehome park if all of the following apply:

(1) The mobilehome park is to replace a mobilehome park that was destroyed by a natural disaster and is located within 20 miles from the destroyed mobilehome park.

(2) No less than 50 percent of the residents of the destroyed mobilehome park at the time of the disaster occurred were low-income residents.

(3) (A) The low-income residents of the destroyed mobilehome park that were displaced by the natural disaster are provided the right of first refusal to occupy mobilehomes in the new mobilehome park. The right of first refusal shall be at least for a 180-day period prior to the offering of leases or rentals at the newly constructed mobilehome park to the public. The terms and conditions of the right of first refusal shall be subject to department approval to protect displaced residents.

(B) The low-income residents of the destroyed mobilehome park that were displaced by the natural disaster are provided lease or rental terms equivalent to those in effect at the destroyed mobilehome park.

(4) No less than 50 percent of the spaces in the mobilehome park are restricted to occupancy by households with incomes not exceeding 50 percent of the area median income of the county in which the destroyed park was located.

(b) (1) For loans issued pursuant to this section, loan principal repayments shall be deferred for the full term of the loan. The department shall charge a transaction fee to cover its costs for processing these transactions. The department may waive or defer some or all of this fee if it determines that the residents of the mobilehome park do not have the ability to make these payments.

(2) For loans issued pursuant to this section, principal and accumulated interest is due and payable upon completion of the term of the loan. The loan shall bear simple interest at the rate of 3 percent per annum on the unpaid principal balance. The department shall require annual loan payments in the minimum amount necessary to cover the costs of project monitoring.

(c) Before providing financing pursuant to this section, the department shall require the provision of all of the following from an applicant for a loan:

(1) Verification that rents at the mobilehome park to be constructed shall be set at a level that does not exceed what is affordable for a household earning 50 percent of the area median income or below.

(2) Verification that the qualified nonprofit housing sponsor or local public entity shall comply with all state and local laws protecting mobilehome park residents, including, but not limited to, any local rental control ordinances and Section 65863.7 of the Government Code.

(d) “Natural disaster” means a natural disaster for which a state of emergency is declared by the Governor, pursuant to Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code.

(Added by Stats. 2018, Ch. 750, Sec. 2. (AB 2056) Effective January 1, 2019.)