(a)  The department shall establish and administer an annuity fund and may, notwithstanding any other provision of this chapter, make commitments to provide annuity payments from the fund directly to sponsors of rental housing developments which will receive construction or mortgage financing, or both, from the Farmers Home Administration to ensure affordable rents to eligible households.

(b)  The department shall require annual reports on the use of annuity funds and any audits necessary to ensure the proper use of moneys from the annuity fund. The department shall review all complaints received concerning those funds and shall have all powers necessary to assure the lawful application of those funds.

(c)  Any rental housing development assisted pursuant to this section shall be governed by a regulatory agreement between the sponsor and the department. The regulatory agreement shall meet all of the requirements imposed by subdivisions (b), (c), (d), and (e) of Section 50757. The regulatory agreement shall also contain restrictions on the occupancy of the dwelling units within the rental housing development necessary to meet the requirements of subdivisions (a), (b), (c), and (e) of Section 50736 and Section 50739. In addition, elderly or physically handicapped households shall be allocated not less than 20 percent, or more than 50 percent, of the assisted units provided pursuant to this section. Other handicapped households shall be eligible for assisted units pursuant to this subdivision or subdivision (a), (b), (c), or (e) of Section 50736 if they otherwise meet the requirements imposed by those provisions.

(d)  The department may utilize up to 2 1/2 percent of the moneys appropriated for purposes of this section for administrative costs incurred in administering this section.

(e)  The department shall make requests for proposals available to all potential sponsors of rental housing developments to be financed by the Farmers Home Administration who request them. The department shall encourage nonprofit sponsors and public agency sponsors to submit proposals. The request for proposals shall provide information about the availability of annuity payments to ensure affordable rents in rental housing developments financed by the Farmers Home Administration, the department’s criteria for making commitments of its annuity funds, and the appropriate application procedure. The applicant shall be required by the department to concurrently submit a preapplication for financing to the Farmers Home Administration. The department shall submit to the Farmers Home Administration those applications for which the department has made commitments for annuity payments under this section. This section does not prohibit a sponsor of a rental housing development from applying directly to the Farmers Home Administration for financing and for federal rental assistance payments.

(f)  “Rental housing development,” as used in this section, includes farm labor housing developments financed or insured by the Farmers Home Administration pursuant to Section 1484, 1485, or 1486 of Title 42 of the United States Code.

(Amended by Stats. 1985, Ch. 697, Sec. 1.)