(a) In order to finance permanent supportive housing for the target population, the department may enter into one or more contracts with the authority as authorized pursuant to Section 5849.35 to provide services for the benefit of the people of the state as described in this section and Sections 5849.8 and 5849.9. The department shall use its best efforts to provide or cause to be provided permanent supportive housing for the target population in consideration for service contract payments to be received from the authority.

(b) Under any service contract with the authority, the department shall administer a competitive program, pursuant to Section 5849.8, and distribution program, pursuant to Section 5849.9, for awarding a total amount not to exceed two billion dollars ($2,000,000,000) among counties to finance capital costs including, but not limited to, acquisition, design, construction, rehabilitation, or preservation, and to capitalize operating reserves, of permanent supportive housing for the target population. For purposes of this section and Sections 5849.8 and 5849.9, measurement of the dollar limit on amounts to be distributed by the department shall be based on the principal amount of bonds issued by the authority and loaned to the department, exclusive of any refunding bonds but including any net premium derived from the sale of the bonds, for deposit in the fund. There shall be no dollar limit on the distribution of moneys in the fund derived from the sources described in paragraphs (2) and (3) of subdivision (b) of Section 5849.4.

(c) For the competitive program established by Section 5849.8, the following shall apply:

(1) A county may apply as the sole applicant if it is the development sponsor or jointly with a separate entity as development sponsor.

(2) Funded developments shall integrate the target population with the general public.

(3) Funded developments shall utilize low barrier tenant selection practices that prioritize vulnerable populations and offer flexible, voluntary, and individualized supportive services.

(4) The guidelines may provide for alternative housing models, such as shared housing models of fewer than five units. Integration requirements may be modified in shared housing.

(5) Funds shall be offered as deferred payment loans to finance capital costs including acquisition, design, construction, rehabilitation, or preservation, and to capitalize operating reserves of, permanent supportive housing for the target population.

(6) The department shall adopt guidelines establishing income and rent standards.

(Amended by Stats. 2016, Ch. 322, Sec. 8. (AB 1628) Effective September 13, 2016.)