Notwithstanding subdivision (b) of Section 52053 or any of the limitations of this part:

(a)  A charter city having seven community development districts established for purposes of Section 105(a)(8) of Public Law 93-383, as amended, and which, prior to February 1, 1980, issued revenue bonds to finance mortgage loans on homes, may issue not more than thirty-three million dollars ($33,000,000) of additional revenue bonds pursuant to local ordinance to make or purchase mortgage loans on homes as defined in Section 52012, subject to the following conditions:

(1)  For mortgage loans on homes located within such a community development district, the income of a purchaser shall not exceed 150 percent of the median income within the city.

(2)  For a home located outside of a community development district, the income of a purchaser shall not exceed 120 percent of the city’s area median income.

(3)  The maximum loan amount for homes undergoing rehabilitation in connection with financing pursuant to this subdivision shall not exceed the median purchase price of a home in the city.

(b)  A city and county may issue not more than sixty million dollars ($60,000,000) of revenue bonds pursuant to local ordinance for the purpose of financing the purchase of residential housing units under the following conditions:

(1)  The proceeds of the bonds will be used in combination with subsidy moneys made available through grant programs such as the Urban Development Action Grant, the Community Development Block Grant or other federal, state, local, or private moneys to finance the purchase of residential housing under an ownership or financing arrangement which provides for the sharing of equity appreciation between one or more occupants of each property and the city and county (or an entity acting on its behalf).

(2)  The revenue bonds and subsidy moneys shall provide for the following:

(A)  At least 50 percent of the participants of the program shall be lower income households, as defined in Section 50079.5, unless after the date six months after the date of issuance of the bonds the city and county makes a written finding that this requirement cannot be achieved in spite of the diligent efforts of the city and county and because of the limited availability of subsidy moneys, in which case at least 25 percent of the participants of the program shall be lower-income households.

(B)  In no case shall participants of the program be persons and families whose incomes are more than 150 percent of the area medium income.

(C)  Not less than 30 percent of the residential housing units financed pursuant to this subdivision shall be units where the participant in the program is the first occupant or units which are being substantially rehabilitated. As used in this subparagraph, “substantial rehabilitation” means rehabilitation in which the costs of rehabilitation equal or exceed 20 percent of the value of the structure after rehabilitation.

However, the requirements of this paragraph may be modified by the city and county, as necessary to meet the conditions of approval of the United States Department of Housing and Urban Development.

(c)  Notwithstanding any other provision of law, bonds issued pursuant to this section shall be legal investments for all trust funds, insurance companies, savings and loan associations, investment companies and banks, both savings and commercial, and shall be legal investments for executors, administrators, trustees and all other fiduciaries. Such bonds shall be legal investments for state school funds and for any funds which may be invested in county, municipal, or school district bonds, and such bonds shall be deemed to be securities which may properly and legally be deposited with, and received by, any state or municipal officer or by any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now, or may hereafter be authorized by law, including deposits to secure public funds.

(d)  It is not the intent of the Legislature in enacting this section to change the provisions of this part, but only to continue programs relating to the goals of this part and to prevent loss of commitments for Urban Development Action Grants.

(Amended by Stats. 1983, Ch. 478, Sec. 8. Effective July 28, 1983.)