Health & Saf. Code, § 50697

(a) The department shall encourage or support all self-help housing program activities in the state and shall do so in accordance with the policies, goals, and objectives of the California Statewide Housing Plan.

(b) The department may seek commitments, on a matching or other basis, from local agencies for the financial support of local self-help housing programs.

(c) The department may seek, obtain, and utilize public and private funds to carry out the purposes and general provisions of this chapter.

(d) The department shall adopt procedures and regulations necessary to implement this chapter. The regulations shall include, but need not be limited to, both of the following requirements:

(1) A maximum mortgage subsidy limit.

(2) Guidelines which either encourage resale to lower income households or provide assistance to new self-help households. These guidelines shall include, but need not be limited to, permitting assumption of department mortgage subsidies or permitting partial or total forgiveness of mortgage subsidies after a specified period of occupancy by eligible households. If a household receiving assistance sells to a household which is not an eligible household, the regulations shall provide for repayment of the mortgage subsidy and may provide for payment of interest on the mortgage subsidy. The guidelines shall also provide that, if the market value at the time of resale to either an eligible or ineligible household is less than the total of outstanding mortgages, liens, and the value of the self-help equity, the amount due in repayment of the mortgage subsidy shall be reduced by the difference between that total and the market value.

(e) Any assistance provided pursuant to this chapter shall be considered a purchase or rehabilitation loan for the purposes of Section 711.5 of the Civil Code.