CA AB1386

Authorizes qualified entities to lease units to secondary tenants (veterans with incomes up to 50-60% of area median income) if extremely low-income veteran tenants cannot be placed within 60 days, subject to department approval.

Requires units leased to secondary tenants to be redesignated to income levels matching the tenant's income, with rent set at a percentage of area median income commensurate with household income.

Mandates that 12 months after a secondary tenant is placed, the next available comparable unit must be rented to an extremely low-income veteran at 30% of area median income to restore project compliance.

Requires qualified entities to document good faith efforts to recruit extremely low-income veteran tenants, including advertising 90 days in advance and coordinating with homeless service providers and the Department of Veterans Affairs.

Creates a 28-day timeline for tax-credit funded projects to place secondary tenants, and allows placement of any homeless veteran earning up to 60% of area median income after 14 additional days if secondary tenants cannot be found.