HSC §50675.5: (a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwell

(a) Eligible costs shall include the cost of developing dwelling units, transitional housing, and childcare, and after school care and social service facilities integrally linked to the assisted dwelling units. (b) Eligible cost categories shall include all of the following: (1) Real property acquisition, including refinancing of existing debt to the extent necessary to reduce debt service to a level consistent with the provision of affordable rents and the fiscal integrity of the project. (2) New construction or rehabilitation, including the conversion of nonresidential structures to residential use. (3) General property improvements that are necessary to correct unsafe, unhealthy, or unsanitary conditions, including renovations and remodeling, including, but not limited to, remodeling of kitchens and bathrooms, installation of new appliances, landscaping, and purchase or installation of central air-conditioning. (4) Necessary and related onsite and offsite improvements. (5) Reasonable developer fees. (6) Reasonable consulting costs. (7) Initial operating costs for housing units. (8) Capitalized reserves for replacement and operation. The department shall offer capitalized operating reserves to supportive housing units after developers have sought capitalized reserves from other potential funding sources. The department may allow capitalized operating reserves to eligible projects to be used for rent subsidies for assisted units reserved for occupancy by households with incomes below limits determined by the department, which shall not exceed the income limit for very low income households. Assisted units may include, but not be limited to, supportive housing units. The department may offer capitalized reserves for operations and supportive services in the form of a grant. To determine project eligibility for capitalized operating reserves, the department may consider all of the following: (A) The availability of funds. (B) The individual financial needs of the project. (C) Whether developers have sought rent or operating subsidies from other potential funding sources. (D) Any other factors the department deems appropriate. (9) Any other costs of rehabilitation or new construction authorized by the department.