CA Health & Safety Code Section 50771.2

(a)

As an alternative to the loan provisions of paragraph (2) of subdivision (b) of Section 50771.1 and the regulatory agreement provisions of subdivision (d) of Section 50771.1, the department may permit the prepayment of a sponsor’s loan anytime on the basis of net cash flow.

(b)

The department shall develop a prepayment plan in conjunction with the sponsor which will ensure the maintenance of affordable rents and the fiscal integrity of the rental housing development. As an incentive to encourage the prepayment of loans, the department may permit the sponsor to retain one-half of the net cash flow. The department shall determine the method for calculating net cash flow, which may include a factor for excess debt service coverage or a return on cash investment to the sponsor.