Cal. Code Regs. Tit. 4, § 5193 - Debt Service Coverage Ratio

(a) For Qualified Residential Rental Projects, the minimum debt service coverage ratio (the ratio of the net operating income from the Project divided by the required debt service on the debt associated with the Project) shall meet the requirements outlined in Section 10327(g)(6) of CTCAC Regulations, except for FHA/HUD projects, RHS projects or projects financed by the California Housing Finance Agency.

(b) Applicants shall complete the following information relating to the Debt Service Coverage Ratio contained in the commitment for credit enhancement or private placement purchase of bonds, using annualized pro-forma figures:

(1) Potential gross income less vacancy rate. Applicants shall use market area vacancy rate or appraised vacancy rate, but in no event use less than 5%. If less than 5% is being used, a written explanation as to the reason must accompany the Application.

(2) net operating income (effective gross income minus operating expenses (include Operating & Replacement Reserves)), and

(3) principal plus interest (debt service), and

(4) the debt service coverage ratio (net operating income divided by principal plus interest). If Potential Gross Income is significantly higher than Monthly Gross Rent, then CDLAC may ask the applicant to identify other sources of Potential Gross Income to ascertain that these other sources are allowed.

(c) The Applicant shall also submit an itemized breakdown of the operating expenses. Annual operating expenses: general administrative (advertising, legal, accounting/audit, security, other and total general administrative), management fee, utilities (fuel, gas, water/sewer, other, total utilities), payroll/payroll taxes (on-site manager, maintenance personnel, insurance, other, total payroll/payroll taxes), maintenance (painting, repairs, trash removal, exterminating, grounds, elevator, other, total maintenance), service amenities budget (service coordinator/social worker, other, total service amenities), other (specify)(total other), total annual residential operating expenses, total real estate taxes, total reserves (operating and replacement), annual commercial operating expenses (if applicable), total commercial space expenses (if applicable) and total operating expenses.

Notes

Cal. Code Regs. Tit. 4, § 5193

Note: Authority cited: Section 8869.94, Government Code. Reference: Sections 8869.84(c), 8869.85(a) and 8869.85(b), Government Code.

Note: Authority cited: Section 8869.94, Government Code. Reference: Sections 8869.84(c), 8869.85(a) and 8869.85(b), Government Code.

1. New section filed 7-29-2010 as an emergency; operative 7-29-2010 (Register 2010, No. 31). A Certificate of Compliance must be transmitted to OAL by 1-25-2011 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 1-6-2011 as an emergency; operative 1-6-2011 (Register 2011, No. 1). A Certificate of Compliance must be transmitted to OAL by 4-6-2011 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 4-1-2011 as an emergency; operative 4-6-2011 (Register 2011, No. 13). A Certificate of Compliance must be transmitted to OAL by 7-5-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-1-2011 order, including amendment of section, transmitted to OAL 6-2-2011 and filed 7-1-2011 (Register 2011, No. 26).
5. Change without regulatory effect designating first paragraph as subsection (a) and adopting new subsections (b)-(c) filed 3-13-2018 pursuant to section 100, title 1, California Code of Regulations (Register 2018, No. 11).
6. Amendment of subsection (a) filed 8-1-2022 as an emergency; operative 8/1/2022 (Register 2022, No. 31). A Certificate of Compliance must be transmitted to OAL by 1-30-2023 or emergency language will be repealed by operation of law on the following day.
7. Amendment of subsection (a) refiled 2-9-2023 as an emergency; operative 2/9/2023 (Register 2023, No. 6). A Certificate of Compliance must be transmitted to OAL by 5-10-2023 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as to 2-9-2023 order transmitted to OAL 4-18-2023 and filed 5/31/2023 (Register 2023, No. 22).
9. Amendment of subsection (a) filed 8-11-2023 as an emergency; operative 8/11/2023 (Register 2023, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-7-2024 or emergency language will be repealed by operation of law on the following day.
10. Amendment of subsection (a) refiled 2-28-2024 as an emergency; operative 2/28/2024 pursuant to Government Code section 11346.1(d) (Register 2024, No. 9). A Certificate of Compliance must be transmitted to OAL by 5-28-2024 or emergency language will be repealed by operation of law on the following day.
11. Although the 2-28-2024 emergency order was scheduled to expire by operation of law on 5-28-2024, amendment of subsection (a) replacing 2-28-2024 emergency order filed 9-26-2024; operative upon adoption by the California Tax Credit Allocation committee on 8/6/2024 pursuant to Government Code section 8869.94(c). Submitted to OAL for filing and printing only pursuant to Government Code section 11343.8 (Register 2024, No. 39).