Cal. Health and Safety Code - HSC § 50770. Section 50770.
Four percent of the funds appropriated for the purposes of this chapter shall be set aside in a Management Reserve Account in the Rental Housing Construction Fund, which is hereby created. All interest or other increment resulting from investment or deposit of moneys in the account shall be deposited in the account.
The department may expend moneys in the account to provide debt service payments or bid at a foreclosure sale, where a loan that is superior to the loan of the department is in default, in order to protect the security or regulatory interest of the department against default, so that, to the extent
feasible, the rental charges to eligible households remain affordable. The department may provide assistance from the fund to a rental housing development if the agency or local finance entity affirmatively demonstrates that assistance is necessary to avoid jeopardizing the fiscal integrity of the rental housing development while maintaining affordable rents and if the department determines that assistance is necessary to offset unavoidable increases in costs to protect the security or regulatory interests of the department.