Cal. Civ. Code § 0770-01-04-.04

(1) (a) The proposed articles of incorporation, partnership agreement, joint venture agreement, trust agreement or
other documents of basic organization of an applicant, and any proposed amendments thereto, shall be submit-
ted to the Executive Director, together with a request for the Agency’s approval of such documents as being in
compliance with the provisions of the Act.

(b) The Agency staff shall review such organizational documents and other information requested pursuant to the
Rules of Practice to determine the qualification of the applicant as a housing sponsor and the compliance of
such documents with the requirements of the Agency. If it is determined that the documents comply, the
Executive Director, or other member of the Agency staff authorized by Resolution of the Agency Board, shall
issue its approval with respect to the organizational documents.

(2) As a condition precedent to the initial closing of an Agency mortgage loan, the housing sponsor shall execute a
Regulatory Agreement with the Agency which shall authorize the Agency to regulate such aspects of the develop-
ment, construction or rehabilitation, and operations of the proposed housing developments and of the operations of
the housing sponsor as the Executive Director shall determine to be necessary or appropriate to protect the interest
of the Agency and to permit fulfillment of the Agency’s duties and responsibilities under the Act and these Rules and
Regulations.

(3) To assure the operational stability of housing developments financed by Agency mortgage loans, the Agency may
establish requirements for the retention of an equity position by a housing sponsor, the requirements for the opera-
tion of a housing development, and the requirement of a housing sponsor’s working capital escrow.

Authority: T.C.A. §13--23--115 (18). Administrative History: Original rule filed September 19, 1975, effective October 19,
1975.