text:
(a) (1) Mortgage lending authorized by this chapter shall be for multifamily rental housing developments at risk of conversion. For the purposes of this chapter, multifamily rental housing developments at risk of conversion shall include any of the following:

(A) Federally assisted housing for which the low-income use restriction may terminate or be substantially modified within four years.

(B) State or locally assisted housing for which the low-income use restrictions may terminate or be substantially modified within four years.

(C) Other privately owned housing serving at least 30 percent lower income tenants which is demonstrated to be at risk of converting to other residential or nonresidential use within four years resulting in the displacement of lower income tenants.

(2) For the purposes of this chapter, “substantially modified” means any change to use restrictions which would result in reducing the number of units originally required to be set aside for lower income tenants or reducing the time the units are required to be set aside for lower income tenants.

(b) Mortgage lending authorized by this chapter for multifamily rental housing developments at risk of conversion shall include the following:

(1) Loans for the acquisition of an existing multifamily rental housing development for a temporary period prior to and pursuant to a plan made or approved by the agency for permanent financing and any necessary rehabilitation of the multifamily rental housing development. Loans made pursuant to this paragraph shall not exceed 90 percent of the value of the property and the costs of holding the housing for a period of up to three years and shall accrue simple interest at a rate of 3 percent per annum. All principal and accrued interest shall be due and payable not later than three years from the date of the loan, or earlier upon sale, refinancing, syndication, or permanent loan closing. The board may extend the term of the loan for one additional year based on a finding that additional time is needed to secure permanent financing for the development. The loan shall be subject to a regulatory agreement with an occupancy restriction for the assisted units for 40 years.

(2) Loans for acquisition or acquisition and rehabilitation secured by a lien junior to other permanent financing for a multifamily rental housing development pursuant to a plan made or approved by the agency for permanent financing and any necessary rehabilitation of the multifamily rental housing development. Loans made pursuant to this paragraph shall be made upon terms and conditions determined by the board, but in an amount which, when added to debt secured by a lien senior to the loan, does not exceed 90 percent of the value of the property or if the property is rehabilitated, 90 percent of the after rehabilitation value. The amount included in an acquisition and rehabilitation loan for rehabilitation shall not exceed $5,000 per unit. The number of assisted units shall be at least equal to the proportion of project cost financed pursuant to this chapter to total project cost. Loans made pursuant to this paragraph shall be for a term of not less than 40 years and shall bear simple interest at a rate of 3 percent per annum. The board may extend the term of the loan for an additional 10 years as long as the rental housing development is operated in a manner consistent with the regulatory agreement. The board, in its discretion, may provide for the current payment of interest or for the accrual of interest over the term of the loan. All principal and any accrued interest shall be due and payable at the end of the loan term, or earlier upon sale, refinancing or syndication of the property unless the agency determines the proceeds obtained from a refinancing or syndication are necessary to maintain the housing development in accordance with the terms and conditions of the regulatory agreement or otherwise further the purposes of the chapter. The loan shall be subject to a regulatory agreement with an occupancy restriction for the assisted units for 40 years.

(c) (1) In making mortgage loans pursuant to this chapter, the agency shall consider the public benefit to be derived from the loan, and the amount of loan shall not exceed the amount necessary to ensure the preservation and or expansion of lower income housing consistent with paragraph (2).

The loan amount shall be limited to the total amount required, when considered with other available financing and assistance, in order to achieve all of the following:

(A) Enable the acquisition or acquisition and rehabilitation of assisted rental housing units.

(B) Ensure that rents for assisted units are in accordance with program requirements.

(C) Operate in compliance with all other program requirements.

(D) Allow a debt service coverage ratio in an amount sufficient to satisfy the requirements of other lenders providing financing for the rental housing development, but not to exceed 115 percent.

(2) In making loans pursuant to this chapter, the agency shall do the following:

(A) Establish application forms and materials.

(B) Accept applications at any time and make loan commitments at scheduled meetings of the board.

(C) Ensure that the housing development meets minimum threshold requirements relating to the capability of the applicant to develop and manage the housing development.

(D) Ensure that the housing development is economically feasible and complies with the program requirements of this chapter.

(E) Use the following preferences in evaluating the housing developments and making loan commitments:

(i) The smallest percentage of the maximum allowable rents for lower income tenants.

(ii) The longest period of affordability.

(iii) The least permanent displacement of lower income tenants.

(iv) The greatest number of units consisting of three or more bedrooms.

(v) The greatest number of units for single room occupancy for very low income tenants.

(vi) The maximum use of private, local, federal, and other financing.

(vii) The greatest impact on the availability of affordable low-income housing in a community.

(F) In making loans pursuant to this subdivision, the agency shall consider variances in market conditions relating to the cost of developing rental housing.

(d) (1) All loans made pursuant to this section shall be subject to a regulatory agreement executed by the borrower and recorded in the office of the county recorder of the county in which the property is located.

(2) The regulatory agreement shall contain at least all of the following:

(A) Restrictions on occupancy of units within the housing development to meet the requirements of paragraphs (1) and (2) of subdivision (b).

(B) Provisions governing tenant selection to ensure occupancy by lower income tenants.

(C) Provisions governing occupancy standards and rental agreements.

(D) Provisions for setting rents pursuant to subdivision (g).

(E) Provisions limiting distribution of earnings pursuant to paragraphs (1) and (2) of subdivision ( l).

(F) Provisions specifying the conditions under which the agency and any intended beneficiary may enforce the regulatory agreement.

(3) The regulatory agreement shall be recorded against the property and shall be deemed a covenant running with the land and shall be binding upon the sponsor and any and all successors in interest in case of sale or transfer of the housing development for the original term of the loan, regardless of any prepayment of the loan, except when the sale or transfer is a result of a foreclosure by the first lienholder.

(e) Not less than 20 percent, nor more than 40 percent, of the assisted units financed pursuant to paragraph (3) of subdivision (a) shall be available on a priority basis to elderly or handicapped persons.

(f) (1) No loan shall be made pursuant to this section if, as a result of the loan, the aggregate number of units in the housing development available to persons of low and very low income would be less than the number of those units available prior to making the loan.

(2) No loan shall be made pursuant to this section unless the number of low- and very low income units is equal to or exceeds 30 percent of the total units in the housing development, except that a loan may be made when the number of units is equal to or exceeds 20 percent of the total units when the housing development was originally financed using tax-exempt bond proceeds and the housing sponsor agrees to increase the number of low- and very low income units to 30 percent of the total units as the units become available.

(g) (1) For all units not receiving assistance payments under Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. Sec. 1437f), or other rental assistance payments, the respective rent for each assisted unit existing prior to loan assistance shall be the base rent for that unit. The base rent for each occupied unit may be annually increased in accordance with the inflation index specified in subdivision (h).

(2) For all units receiving project-based payments under Section 8 of the United States Housing Act of 1937 or other rental assistance payments, at the time these payments cease to be available, base rents shall be established as follows: rents for units occupied by tenants earning less than 35 percent of median income shall be no more than 30 percent of 35 percent of median income adjusted for family size appropriate for the unit, rents for units occupied by tenants earning between 35 percent and 50 percent of median income shall be 30 percent of 50 percent of median income adjusted for family size appropriate for the unit, rents for units occupied by tenants earning between 51 percent and 80 percent of median income shall be 30 percent of 60 percent of median income adjusted for family size appropriate for the unit. The base rent for each unit may be annually increased in accordance with the inflation index specified in subdivision (h).

In determining the loan amount, the agency shall ensure that these rent levels are achieved at the time the rental assistance payments cease, taking into account the projected date for cessation of the rental payments. The agency shall require that sponsors make every effort to seek renewal of the rental assistance payments if renewal is possible.

(3) Upon vacancy of an assisted unit, the rent for that unit shall be the last rent charged pursuant to paragraph (1) or (2). The rent for units may be annually increased in accordance with the inflation index specified in subdivision (h).

(4) For the life of the project, the sponsor shall maintain the assisted units in the proportion of tenants with incomes less than 35 percent of median income, between 35 percent and 50 percent of median income, and between 51 percent and 80 percent of median income as existed in the project at the time of application. Upon request of the sponsor, the agency may allow vacated units originally occupied by tenants earning less than 35 percent of median income to be rented to tenants earning up to 50 percent of median income, adjusted for family size, in the event the agency determines that the base rent is not affordable to tenants below 35 percent of median income.

(h) Rents for units financed pursuant to this section may be automatically increased by the sponsor annually according to an inflation index to be determined by the board. The inflation index shall reflect anticipated annual changes in rental housing development operating costs from the base year in which rents are initially established for the housing development. Any sponsor may appeal to the agency in writing for a greater adjustment in rents necessary to ensure the fiscal integrity of the housing development; the request on appeal shall be deemed approved unless rejected by the agency within 60 days from the date of receipt of the appeal.

(i) Not less than 20 percent of funds made available to the agency for the purposes specified in this section shall be made available for loans in rural areas.

(j) (1) If a multifamily rental housing development assisted by this chapter is not economically feasible, the sponsor, with the approval of the agency, may remove one or more assisted units from the occupancy requirements for a period of time necessary for the development to again become economically feasible.

(2) For purposes of paragraph (1), “economically feasible” means that project revenue equals or exceeds project operating expenses, excluding any return on investment.

(3) For purposes of paragraph (2), “operating expenses” means the reasonable expenses necessary to operate and maintain the project in habitable condition, including debt service, taxes, and reasonable reserves.

(4) For purposes of this paragraph, debt service shall not include the portion of payments of principal and interest attributed to any excess refinanced principal over the outstanding principal of the loan that was refinanced, except to the extent the excess was used for the rehabilitation of the project.

(k) To the extent that any provisions of this section relating to use and rent restriction conflict with the requirements of federal law, the requirements of federal law shall prevail for the period the project is subject to federal restrictions.

( l) A loan made pursuant to paragraph (1) or (2) of subdivision (b) may be assumed if the terms, conditions, and requirements of the regulatory agreement are maintained.

(m) (1) A nonprofit sponsor, other than a governmental agency, may distribute earnings from assisted and nonassisted units in an amount no greater than 8 percent of the nonprofit sponsor’s actual investment in the housing development. A for-profit sponsor may chose between the following options:

(A) It may distribute earnings from assisted and nonassisted units in an amount no greater than 8 percent of its actual investment in the housing development.

(B) It may forgo distribution of earnings from assisted units and not be subject to any limitation on the amount of distribution it receives from nonassisted units.

(2) The housing sponsor shall apply any earnings in excess of the amount eligible to be distributed under paragraph (1) to reduce rent of assisted units or to increase the number of assisted units.


kind: section

code: HSC

text: Mortgages made by the agency under authority of this chapter shall be secured by a first deed of trust, or by a deed of trust junior to a first deed of trust if it is necessary to accomplish the purposes of this chapter. Except as otherwise specified in this chapter, the principal amount of, and the conditions of mortgage loans, shall be determined by the board.

history: (History: Added by Stats. 1990, Ch. 577, Sec. 1. Effective September 5, 1990.)

division: 31. HOUSING AND HOME FINANCE

part: 3. CALIFORNIA HOUSING FINANCE AGENCY

chapter: 10. Multifamily Housing

path: 31. HOUSING AND HOME FINANCE > 3. CALIFORNIA HOUSING FINANCE AGENCY > 10. Multifamily Housing


text: The agency shall adopt policies by resolution of the board for the admission of tenants, termination of tenancies, and eligibility of developers of housing financed under this part.


text: The agency shall consult with an outside advisory committee to assist in the implementation of this chapter. The advisory committee shall be comprised of individuals who are knowledgeable about housing finance, the conversion of subsidized housing, the operation of low-income multifamily rental housing, the needs of lower income tenants and the intent and objectives of this chapter.


text: The agency shall have all powers granted under authority of this part to make commitments and execute agreements with developers, other lenders, and any public or private entity in making mortgage loans authorized by this chapter.


text: This chapter shall be known and may be cited as the California Homebuyer’s Downpayment Assistance Program.

history: (History: Added by Stats. 2000, Ch. 81, Sec. 1. Effective July 5, 2000. Inoperative on July 1, 2016, as provided in Section 51511.)

path: 31. HOUSING AND HOME FINANCE > 3. CALIFORNIA HOUSING FINANCE AGENCY > 11. California Homebuyer’s Downpayment Assistance Program


text:
The Legislature finds and declares all of the following:

(a) There is a continuing and urgent need to provide affordable mortgage financing to meet the increasingly unfulfilled housing needs of citizens of this state.

(b) The high cost of housing impedes the ability of California employers to compete in the national marketplace for employees.

(c) Affordable housing enhances the quality of life for California residents and provides fuel for the state’s economic engine.

(d) Housing is a critical component of the California economy, both as an income producing sector and a principal factor in economic development.

(e) California’s housing crisis severely impacts families struggling to provide safe, stable homes for their children to grow and learn and the workers who are the backbone of many of the state’s most important industries.

(f) The percentage of Californians able to purchase their own homes continues to decline, even as that percentage climbs for the rest of the nation.

(g) Therefore, this chapter is enacted to make existing financing for residential mortgages more affordable to California’s homebuyers.

chapter: 11. California Homebuyer’s Downpayment Assistance Program


text: The purpose of the California Homebuyer’s Downpayment Assistance Program is to assist first-time low- and moderate-income homebuyers utilizing existing mortgage financing.


text:
(a) The agency shall administer a downpayment assistance program that includes, but is not limited to, all of the following:

(1) Downpayment assistance shall include, but not be limited to, a deferred-payment, low-interest, junior mortgage loan to reduce the principal and interest payments and make financing affordable to first-time low- and moderate-income home buyers.

(2) (A) Except as provided in subparagraph (B) or (C), the amount of downpayment assistance shall not exceed 3 percent of the home sale price.

(B) The amount of downpayment assistance for a new home within an infill opportunity zone, as defined in Section 65088.1 of the Government Code, a transit village development district, as defined in Section 65460.4 of the Government Code, or a transit-oriented development specific plan area, as defined in paragraph (6), shall not exceed 5 percent of the purchase price or the appraised value, whichever amount is less, of the new home. The borrower of the downpayment assistance shall provide the lender originating the loan with a certification from the local government agency administering the infill opportunity zone, the transit village development district, or the transit-oriented development specific plan area that states that the property involved in the loan transaction is within the boundaries of either the infill opportunity zone, the transit village development district, or the transit-oriented development specific plan area.

(C) Notwithstanding paragraph (1), the agency may, but is not required to, provide downpayment assistance that does not exceed 6 percent of the home sale price to first-time low-income home buyers who, as documented to the agency by a nonprofit organization that is certified and funded to provide home ownership counseling by a federally funded national nonprofit corporation, are purchasing a residence in a community revitalization area targeted by the nonprofit organization as a neighborhood in need of economic stimulation, renovation, and rehabilitation through efforts that include increased home ownership opportunities for low-income families. The agency shall not use more than six million dollars ($6,000,000) in funds made available pursuant to Section 53533 for the purposes of this paragraph.

(3) The amount of the downpayment assistance shall be secured by a deed of trust in a junior position to the primary financing provided. The term of the loan for the downpayment assistance shall not exceed the term of the primary loan.

(4) (A) Except as provided in subparagraphs (B) and (C), the amount of the downpayment assistance shall be due and payable at the end of the term or upon sale of or refinancing of the home. The borrower may refinance the mortgages on the home provided that the principal and accrued interest on the junior mortgage loan securing the downpayment assistance are repaid in full. All repayments shall be made to the agency to be reallocated for the purposes of this chapter.

(B) The agency may, in its discretion, permit the downpayment assistance loan to be subordinated to refinancing if it determines that the borrower has demonstrated hardship, subordination is required to avoid foreclosure, and the new loan meets the agency’s underwriting requirements. The agency may permit subordination on those terms and conditions as it determines are reasonable.

(C) The amount of the downpayment assistance shall not be due and payable upon sale of the home if the first mortgage loan is insured by the Federal Housing Administration (FHA) or if the first mortgage loan is, or has been, transferred to the FHA, or if the requirement is otherwise contrary to regulations of the United States Department of Housing and Urban Development governing FHA insured first mortgage loans.

(5) The agency may use up to 5 percent of the funds appropriated by the Legislature for purposes of this chapter to administer this program.

(6) For purposes of this section, “transit-oriented development specific plan area” means a specific plan that meets the criteria set forth in Section 65451 of the Government Code, is centered around a rail or light-rail station, ferry terminal, bus hub, or bus transfer station, and is intended to achieve a higher density use of land that facilitates use of the transit station.

(b) In addition to the downpayment assistance program authorized by subdivision (a), the agency may, at its discretion, use not more than seventy-five million dollars ($75,000,000) of the funds available pursuant to this chapter to finance the acquisition of land and the construction and development of housing developments, as defined in Section 50073.5, and for-sale residential structures through short-term loans pursuant to its authority pursuant to Section 51100. However, the agency shall make downpayment assistance provided pursuant to paragraph (1), subparagraphs (A) and (B) of paragraph (2), and paragraphs (3) to (5), inclusive, of subdivision (a) the priority use for these funds. A loan made pursuant to this section is not subject to Article 4 (commencing with Section 51175) of Chapter 5.

history: (History: Amended (as amended by Stats. 2013, Ch. 82) by Stats. 2013, Ch. 770, Sec. 1. (AB 637) Effective January 1, 2014. Inoperative on July 1, 2016, as provided in Section 51511.)


text:
(a) In addition to the downpayment assistance program authorized by Section 51504, and notwithstanding any provision of Section 51504 to the contrary, the agency shall provide downpayment assistance from the funds set aside pursuant to subparagraph (D) of paragraph (7) of subdivision (a) of Section 53533 for the purposes of the portion of the Extra Credit Teacher Home Purchase Program provided for in subdivision (g) of Section 8869.84 of the Government Code and any other school personnel home ownership assistance programs as set forth by the California Debt Limit Allocation Committee, as operated by the agency. Notwithstanding the foregoing, the agency may, but is not required to, provide downpayment assistance pursuant to this section to any local issuer participating in the Extra Credit Teacher Home Purchase Program and any other school personnel home ownership assistance programs as set forth by the California Debt Limit Allocation Committee.

(b) (1) Downpayment assistance for purposes of this section shall be subject to, and shall meet the requirements of, the Extra Credit Teacher Home Purchase Program and any other school personnel home ownership programs as set forth by the California Debt Limit Allocation Committee, and shall include, but not be limited to, deferred payment, low interest rate loans.

(2) Except as provided in paragraphs (3) and (5), payment of principal and interest is deferred until the time that the home is sold or refinanced.

(3) The agency may, in its discretion, permit the downpayment assistance loan to be subordinated to refinancing if it determines that the borrower has demonstrated hardship, subordination is required to avoid foreclosure, and the new loan meets the agency’s underwriting requirements. The agency may permit subordination on those terms and conditions as it determines are reasonable, but subordination is not permitted if the borrower has sufficient equity to repay the loan.

(4) This downpayment assistance shall meet the requirements of paragraph (3) of, and subparagraph (A) of paragraph (4) of, subdivision (a) of Section 51504.

(5) The amount of the downpayment assistance shall not be due and payable upon sale of the home if the first mortgage loan is insured by the Federal Housing Administration (FHA) or if the first mortgage loan is, or has been, transferred to the FHA, or if the requirement is otherwise contrary to regulations of the United States Department of Housing and Urban Development governing FHA insured first mortgage loans.

(c) Loans made pursuant to this section may include a provision whereby interest, principal, or both, of the loan is forgiven upon conditions to be established by the agency, or any other provision designed to carry out the purposes of the Extra Credit Teacher Home Purchase Program and any other school personnel home ownership programs as set forth by the California Debt Limit Allocation Committee.

(d) Downpayment assistance pursuant to this section shall not exceed the greater of seven thousand five hundred dollars ($7,500) or 3 percent of the home sales price. However, the agency may, with the concurrence of the California Debt Limit Allocation Committee, establish higher assistance limits as necessary to ensure sufficient assistance to allow program participation in high cost areas.

history: (History: Amended by Stats. 2015, Ch. 303, Sec. 327. (AB 731) Effective January 1, 2016. Inoperative on July 1, 2016, as provided in Section 51511.)


text: The downpayment assistance provided by this program shall be limited to first-time homebuyers.


text: The agency shall have all the powers conferred upon it by this part (commencing with Section 50900) in administering this chapter.


text:
(a) This chapter, except for this section, shall not be operative on and after July 1, 2016.

(b) On and after July 1, 2016, any unobligated amounts remaining in any fund established for the purposes of this chapter, including the repayment of disbursed moneys, or any interest earned from the investment of those moneys or any other moneys accruing to the fund from any source, shall be transferred to the Home Purchase Assistance Fund and are continuously appropriated to the agency for the purposes described in Section 51342.

history: (History: Added by Stats. 2016, Ch. 32, Sec. 82. (SB 837) Effective June 27, 2016. Note: Termination clause affects Chapter 11, commencing with Section 51500, except for this section.)


text: This chapter shall be known, and may be cited, as the California Dream for All Program.

history: (History: Added by Stats. 2022, Ch. 70, Sec. 43. (SB 197) Effective June 30, 2022.)

chapter: 12. California Dream for All Program

path: 31. HOUSING AND HOME FINANCE > 3. CALIFORNIA HOUSING FINANCE AGENCY > 12. California Dream for All Program


text:
The Legislature finds and declares all of the following:

(a) Housing prices in California have risen dramatically in all parts of the state in the past decade, while the wealth gap, especially the racial wealth gap, continues to be a growing problem in California.

(b) Households who cannot afford a large down payment to offset the higher prices are increasingly locked out of homeownership. This disproportionately locks out first-time and first-generation homebuyers. This is particularly true for households of color who have faced decades of systemic racial barriers.

(c) Thriving in the middle class and building generational wealth, the California dream, starts with homeownership.

(d) Therefore, the California Dream for All Program is enacted to establish a revolving, shared appreciation model to make homeownership more attainable for eligible low- and moderate-income first-time homebuyers.

(e) In a typical example, the program could provide 20 percent toward the purchase price and the homebuyer would finance the remaining 80 percent with a traditional mortgage. This would result in the first-time homebuyer purchasing the home with a low downpayment, while also lowering monthly mortgage payments by more than thirty percent compared with existing traditional low downpayment programs, a savings of more than $12,000 per year. Once the house is resold or refinanced, the program would be reimbursed for the 20 percent share, and the proceeds would revolve through the program to support additional first-time homebuyers.


text:
For the purposes of this chapter:

(a) “First-time homebuyer” has the same meaning as defined in Section 50068.5.

(b) “Fund” means the California Dream for All Fund.

(c) “Program” means the California Dream for All Program.

(d) “Shared appreciation loan” means a deferred-payment subordinate mortgage loan, the repayment of which is based on the amount of the subordinate loan plus the appreciation in the value of the home financed by the loan from the time of purchase to the time the home is sold or refinanced.


text:
(a) The California Dream for All Program is hereby established to provide shared appreciation loans to qualified first-time homebuyers. The program shall be limited to providing assistance to low- and moderate-income homebuyers in the purchase of owner-occupied homes. The agency, subject to the availability of funds for the purposes of this chapter, shall implement and administer the California Dream for All Program in accordance with this chapter.

(b) (1) In implementing this part, the agency shall adopt policies, rules, and regulations by resolution of the board of directors of the agency and consistent with this part to achieve all of the following:

(A) Provide assistance to meaningfully expand access to homeownership.

(B) Expand opportunities for California households to accumulate wealth for themselves and their families. The agency shall make any necessary program adjustments consistent with the requirements of this chapter, which may include limiting the percentage of appreciation payable under the program, to ensure that design of the loan product is not an unreasonable impediment to homeowner wealth creation.

(C) Maximize the number of households assisted over time by exploring and implementing methods for selling subordinate second mortgages originated pursuant to this chapter to investors in order to generate additional funding for the program.

(D) Establish a revolving, shared appreciation first-time homebuyer program with the goal of eventually providing up to one billion dollars ($1,000,000,000) per year for first-time homebuyers.

(E) The amount of assistance shall only be made available in conjunction with first mortgage loan financing provided by the agency, and funds available pursuant to this chapter shall also be available for interest rate buydowns and closing cost assistance for that first mortgage loan financing. Any funds made available for interest rate buydowns shall be made in conjunction with a shared appreciation loan.

(F) All repayments shall be deposited into the fund for ongoing use in the program.

(G) Sustainability for the agency without significantly adversely affecting its borrowing capacity or ability to meet other affordable housing or agency needs.

(H) Adequate consumer protection and consumer disclosure protections.

(2) Policies, rules, and regulations adopted pursuant to this part shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.


text:
(a) (1) There is hereby established in the State Treasury the California Dream for All Fund.

(2) Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the agency, without regard to fiscal years, for expenditure pursuant to this chapter and defraying administrative costs of the agency.

(3) Notwithstanding Section 16305.7 of the Government Code, any interest earned or other increment derived from investments made from moneys in the fund shall be deposited in the fund.

(b) Moneys deposited in the fund may include appropriations from the Legislature from the General Fund or other state fund, proceeds from the agency issuing revenue bonds for the purposes set forth in this chapter pursuant to Section 51350, the sale or issuance of any debt instrument secured by repayment of loans originated pursuant to this chapter, and repayments from the program.


text: The state and the agency shall not be liable beyond the assets of the fund for any obligation in connection therewith.


text:
(a) The agency shall, on or before January 10, 2023, and annually thereafter, furnish a report to the Legislature providing details of program implementation, including, but not be limited to, the number of loans made and the characteristics of the borrowers.

(b) The report required by this section shall be submitted pursuant to Section 9795 of the Government Code.


text:
(a) The agency, in consultation with the staff of the Legislative Analyst’s Office, the Senate Committees on Banking and Financial Institutions, Budget and Fiscal Review, and Housing, and the Assembly Committees on Banking and Finance, Budget, and Housing and Community Development, shall do all of the following:

(1) Assess outcomes and lessons learned from the first two rounds of the program.

(2) Provide recommendations for further improvements to the existing program.

(3) Develop options for the next phase of the program, including, but not limited to, an option to expand the program to enable participation by entities such as local governments, public institutions of higher education, nonprofit organizations, school districts, community foundations, and large private employers.

(b) (1) On or before January 31, 2026, the agency shall furnish a report to the Legislature detailing its assessment, options, and recommendations, pursuant to subdivision (a).

(2) A report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

(c) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.

history: (History: Added by Stats. 2024, Ch. 48, Sec. 19. (AB 166) Effective July 2, 2024. Repealed on January 1, 2027, by its own provisions.)


text:
(a) (1) The agency shall develop a borrower education program and disclosure statement designed to provide a borrower with sufficient information to understand the terms of a shared appreciation loan provided pursuant to this chapter.

(2) The disclosure statement required by this subdivision shall include the specific terms of the shared appreciation loan offered to the borrower.

(b) (1) Before making a shared appreciation loan, a participating lender shall provide a borrower with information to access the borrower education program and disclosure statement developed pursuant to subdivision (a).

(2) A participating lender shall require the borrower to acknowledge the receipt of the disclosure statement developed pursuant to subdivision (a) before closing the loan.

(c) (1) The agency may use program funds to design and implement an ongoing borrower outreach program that provides regular disclosures or loan counseling services to a borrower while the borrower has a shared appreciation loan outstanding.

(2) The purpose of the ongoing borrower outreach program authorized by this subdivision shall be to encourage a borrower to satisfy the shared appreciation loan in a manner that is in the best interest of the borrower.

(d) (1) The agency may meet its obligations under this section by partnering or contracting with housing counselors, community organizations with expertise in housing and mortgage finance, or any other person with expertise in housing or mortgage finance.

(2) In exercising its authority under this subdivision, the agency shall take reasonable efforts to ensure that any person or organization that assists the agency in meeting the agency’s obligations under this section is free of any conflicts of interests.


text:
(a) The agency shall evaluate options to finance the program with one billion dollars ($1,000,000,000) to two billion dollars ($2,000,000,000) annually. Options evaluated may include, but are not limited to, the issuance of revenue bonds, general obligation bonds, or other debt instruments, or other available alternatives.

(b) In developing the scope of the evaluation required by this section, the agency shall consult with the State Treasurer, the Legislature, and any other relevant stakeholders.

(c) On or before March 1, 2024, the agency shall submit a report on the evaluation to the Legislature in accordance with Section 9795 of the Government Code.

history: (History: Added by Stats. 2023, Ch. 196, Sec. 15. (SB 143) Effective September 13, 2023.)


text:
Prior to the disbursement of the remainder of funding for the program appropriated in the 2022 Budget Act, and prior to the disbursement of any funding for the program that may be appropriated in the 2023 Budget Act, the agency shall review the program terms and parameters, and shall implement adjustments designed to achieve the following program improvements:

(a) Defining first-generation homebuyers.

(b) Targeting funds to aid first-generation homebuyers.

(c) Supporting an equitable distribution of program funds in different regions of the state.

(d) Prioritizing participation by homebuyers in the lower tiers of the income eligibility structure.

history: (History: Added by Stats. 2023, Ch. 196, Sec. 16. (SB 143) Effective September 13, 2023.)


text:
For purposes of this chapter:

(a) “Homeowner” means an owner of a single-family residential property that does not own more than three residential properties that consist of one to four, inclusive, units.

(b) “Program” means the Accessory Dwelling Unit Program administered by the agency.

(c) “Agency” means the California Housing Finance Agency.

history: (History: Added by Stats. 2022, Ch. 570, Sec. 11. (AB 157) Effective September 27, 2022.)

chapter: 13. Accessory Dwelling Unit Program

path: 31. HOUSING AND HOME FINANCE > 3. CALIFORNIA HOUSING FINANCE AGENCY > 13. Accessory Dwelling Unit Program


text:
(a) The agency shall convene a working group to develop recommendations for the purposes of the program. The purpose of the program is to assist homeowners in qualifying for loans to construct accessory dwelling units and junior accessory dwelling units on their property and to increase access to capital for homeowners interested in building accessory dwelling units.

(1) The working group shall include, but not be limited to, representatives from federal mortgage agencies, private lenders, community development financial institutions, community-based organizations, local housing trust funds, joint powers authorities, regional housing finance authorities, and credit unions.

(2) The working group shall explore the feasibility of different options to increase program utilization, including, but not limited to, a loan loss reserve or other credit enhancements to encourage lending, and different loan products such as renovation loans, bridge loans, and second mortgages.

(3) The working group shall explore different opportunities to mitigate risks for lenders, including, but not limited to, loan guarantees, mortgage insurance, managed escrow, and rental income guidelines.

(4) The working group shall explore opportunities to increase outreach and education to inform homeowners about the various loan and grant products available to them.

(5) The working group shall explore expanding financing options to construction costs and factory-built accessory dwelling units, including through partnerships with local agencies and qualified nonprofits. The working group shall also explore matching fund opportunities for the grants.

(6) The working group shall explore different opportunities to ease constraints that limit the loan process for homeowners, including issues that are not controlled by the agency, including, but not limited to, federal lending standards and local practices.

(b) The working group shall finish developing recommendations by July 1, 2023, for the agency to consider in the next update of its accessory dwelling unit guidelines.


text: The agency shall conduct an evaluation of the program and shall report the agency’s findings to the Legislature by no later than January 1, 2025. The report shall be submitted in compliance with Section 9795 of the Government Code.

history: (History: Added by Stats. 2023, Ch. 169, Sec. 1. (AB 932) Effective January 1, 2024.)


text:
The Legislature finds and declares as follows:

(a) For reasons of prudent investment policy, California’s public and private lending institutions are not making mortgage financing available for certain single- and multifamily residential housing occupied or intended to be occupied by substantial numbers of persons and families of low and moderate income because of the perceived risks these loans entail. The absence of this financing has also caused and contributed to the deterioration of residential neighborhoods, has inhibited government in its attempts to arrest and reverse deterioration through local code enforcement programs, and has generally reduced or limited the supply of safe, decent, and sanitary housing available to persons and families of low and moderate income.

(b) The absence of financing has resulted in persons and families who are not able to realize financial security through equity accumulation and psychological security through a sense of permanence and control over the direction of their lives, as well as a lack of job creation linked to housing construction or the sale of existing housing.

(c) The percentage of California residents who own their own homes is considerably lower than the national average.

(d) All of the factors set forth in subdivisions (a) to (c), inclusive, have hindered the state’s economy and the general well-being of the state’s populace.

(e) The state has authorized state agencies, local agencies, redevelopment agencies, and housing authorities to provide financing for preservation and construction of residential structures, including single-family and multifamily residential housing, to enhance housing opportunities for persons and families of low or moderate income. However, some of these local public entities will be unable to sell bonds pursuant to that authorization on terms sufficiently favorable to enable them to make loans at less than the market-rate interest because of a lack of adequate bond security.

(f) Although the agencies are empowered to sell bonds in order to raise funds for housing assistance, they may be unable to market these bonds on terms and at interest rates adequate to enable these agencies to accomplish their purposes.

(g) For reasons of prudent investment policy, private lending institutions and public agencies are not making mortgage financing available for the rehabilitation of buildings identified by local jurisdictions as being potentially hazardous.

(h) For reasons of prudent investment policy, private lending institutions and public agencies are not making mortgage financing available for residential housing for low- and moderate-income households in California due to an inadequate supply of reliable, consistent, and affordable mortgage guaranty insurance.

(i) To provide credit enhancements for the development of new, or the purchase or refinancing of existing, low-income and moderate-income multifamily housing.

history: (History: Repealed and added by Stats. 1993, Ch. 115, Sec. 4. Effective July 15, 1993.)

part: 4. BOND AND LOAN INSURANCE

chapter: 1. General Provisions and Definitions

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 1. General Provisions and Definitions


text:
It is the intent of the Legislature in enacting this part to establish programs of bond and loan insurance for the following purposes:

(a) To encourage homeownership opportunities for low- and moderate-income rental households and to encourage multifamily residential construction and rehabilitation, all of which will revitalize the state’s economy and provide security for these households.

(b) To encourage and facilitate the preservation of existing housing and improve housing opportunities by reducing the risk factor for all of the following:

(1) Loans to persons and families of low and moderate income for housing in older deteriorating areas and neighborhood preservation areas.

(2) Bonds issued by governmental agencies for the purpose of providing housing for persons and families of low or moderate income.

(3) Loans to provide housing for persons and families of low or moderate income.

(4) Privately financed loans for multifamily residential housing that benefits low- and moderate-income households.

(5) Construction loan loss guarantee assistance for rehabilitation of buildings in need of rehabilitation improvements, where the building has been identified by local jurisdictions as being potentially hazardous.

(c) To encourage and facilitate housing opportunities for low-income and moderate-income households which might not readily be available in the private market due to, in part, location, type of housing, and income group serviced, provided, however, that the actuarial soundness of the insurance fund not be jeopardized.

(d) To provide single-family and multifamily residential housing mortgage guaranty insurance.

(e) To provide single-family and multifamily residential guaranty insurance for construction loans.

(f) To provide credit enhancements for the development of new, or the purchase or refinancing of existing, low-income and moderate-income housing.


text:
The Legislature finds and declares the following:

The California Housing Finance Agency, in administering the mortgage guaranty insurance program, as it is currently constituted in law, will adopt a new five-year business plan pursuant to board resolution at the June 9, 1993, meeting of the agency’s board of directors. The business plan will contain all of the financial resources of the agency necessary for this insurance fund to create a mortgage guaranty insurance underwriting capacity for single-family loans at one billion two hundred million dollars ($1,200,000,000) of gross insurance. In order to initiate this program, the agency will provide its 1993 commitment of eighteen million dollars ($18,000,000) as soon as reasonably practicable following the adoption of the June 9, 1993, board resolution. The agency will also commit that it will provide its 1994 pledge of eleven million dollars ($11,000,000) at its January 1994 board of directors meeting. During the five-year time period, the program will result in a significant beneficial economic impact on the state’s economy, particularly on the homebuilding and real estate resale markets. As such, the agency will remain fully committed to implementing the plan, unless the economic and fiscal expectations of the agency fail to materialize so that implementation of the plan, in whole or in part, is no longer possible without jeopardizing the fiscal integrity or the bond rating of the agency.

history: (History: Added by Stats. 1993, Ch. 115, Sec. 4. Effective July 15, 1993.)


text:
(a) The agency shall require that occupancy of housing for which a loan is insured pursuant to this part shall be open to all regardless of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, and that contractors and subcontractors engaged in the construction or rehabilitation of housing funded by a loan insured pursuant to this part shall provide an equal opportunity for employment without discrimination as to any basis listed in subdivision (a) of Section 12940 of the Government Code, as those bases are defined in Sections 12926 and 12926.1 of the Government Code, and except as otherwise provided in Section 12940 of the Government Code.

(b) Notwithstanding subdivision (a), with respect to familial status, subdivision (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subdivision (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51, Section 4760, and Section 6714 of the Civil Code, and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to subdivision (a).

(c) A qualified developer shall certify compliance with this section and Section 50955 according to requirements specified by the pertinent criteria of the agency.

history: (History: Amended (as amended by Stats. 2012, Ch. 181, Sec. 76) by Stats. 2013, Ch. 605, Sec. 45. (SB 752) Effective January 1, 2014.)


text:
(a) Unless the context otherwise requires, the definitions contained in this chapter shall govern the construction of this part. These definitions shall be in addition to definitions set forth in Part 1 (commencing with Section 50000) of this division, except that, where the same term is defined in this chapter and in that part, the definition of the term contained in this chapter shall prevail.

(b) As used in this part:

(1) “Approved lending institution” means a qualified mortgage lender approved by the agency for participation in a program of loan insurance, including those successors and assigns of any such institution as are permitted by the agency. “Approved lending institution” shall also include the agency.

(1.5) “Board” or “board of directors” means the Board of Directors of the California Housing Finance Agency.

(2) “Bond reserve requirement” means an amount specified by the agency which shall, as of any particular date of computation, be at least equal to the total of both of the following:

(A) Insurance benefits due and payable as of the date under contracts of bond insurance.

(B) The percentage, required by the rating agencies or required to adequately provide security for the bonds insured pursuant to this part, of the sum of the aggregate insurance outstanding under contracts of bond insurance and the aggregate amounts to be insured under the agency’s commitments to insure bonds.

(2.5) “Credit enhancement” means a method of reducing risk for a lender through letters of credit and bond and loan insurance.

(3) “Executive director” means the Executive Director of the California Housing Finance Agency.

(4) “Fund” or “insurance fund” means the California Housing Loan Insurance Fund, which is hereby created.

(5) “Insurance reserve requirement” means an amount established by the agency, which shall, as of any particular date of computation, be at least equal to the total of both of the following:

(A) Insurance benefits due and payable as of that date pursuant to contracts of loan insurance.

(B) An amount calculated to equal any required policyholder’s surplus which would be required of a mortgage guaranty insurer under Section 12640.05 of the Insurance Code.

(6) “Insured loan” means a loan insured pursuant to Chapter 4 (commencing with Section 51650).

(7) “Loan-to-value limitation” means a limitation on the ratio of the original principal balance of a loan to the appraised value at the time of execution of the contract of insurance, including the estimated costs of repair and rehabilitation and sale, if any, of the property securing it.

(8) “Mortgage guaranty insurance” means either of the following:

(A) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a first lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families.

(B) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a junior lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families.

(C) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate, provided the improvement on the real estate is a building or buildings designed for occupancy by five or more families or designed to be occupied for industrial or commercial purposes.

(9) “Multifamily residential housing” means an improvement on real estate which is a building or buildings containing five or more residential units.

(10) “Persons and families of low or moderate income” means “persons and families of low or moderate income” as defined in Section 50093.

(11) “Qualified developer” means a housing sponsor which is certified by the agency to be qualified according to experience, financial capability, and any other pertinent criteria as the fund may establish to carry out rehabilitation and new construction with loans insured pursuant to this part.

(12) “Rehabilitated structure” means a residential structure which becomes eligible for an insured acquisition loan by rehabilitation conducted pursuant to rules of the agency, whether or not loan insurance is provided by the agency for that rehabilitation.

(13) “Single-family residential housing” means an improvement on real estate which is a building or a condominium unit or buildings containing one to four units.


text:
(a) The agency shall, with respect to the implementation of this part, and notwithstanding any other provision of law, have the general powers set forth in Sections 51050 and 51058 and in this part and, in addition, may do any and all things necessary to carry out its purposes and exercise the powers expressly granted by this part.

(b) The fund shall develop and maintain complete and current statistics and other information with respect to the loan insurance program, including, but not limited to, each of the following:

(1) Mortgage arrearages, defaults, and foreclosures on insured loans.

(2) Expenses incurred as a result of those arrearages, defaults, and foreclosures.

(3) The extent of displacement caused by availability of insured loans.

(c) The information required by subdivision (b) shall be provided in the agency’s annual report as required by Section 51622.

chapter: 2. Administration

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 2. Administration


text:
(a) The California Housing Loan Insurance Fund is hereby created in the State Treasury.

(b) The California Housing Insurance Fund is hereby renamed the California Housing Loan Insurance Fund. All references in any provision of law to the California Housing Insurance Fund shall be deemed to refer to the California Housing Loan Insurance Fund. Notwithstanding Section 13340 of the Government Code, all money in the insurance fund is hereby continuously appropriated to the agency without regard to fiscal year for the purpose of insuring loans and bonds pursuant to this part and for the purpose of defraying administrative expenses incurred by the agency in operating these programs of loan and bond insurance. All insurance premiums shall be deposited in the insurance fund. Mortgage insurance in force under certificates of insurance by the California Housing Insurance Fund shall continue in force without interruption after the effective date of this act.

(c) Notwithstanding Chapter 2 (commencing with Section 12850) of Part 2.5 of Division 3 of Title 2 of the Government Code, Article 2 (commencing with Section 13320) of Chapter 3 of Part 3 of Division 3 of Title 2 of the Government Code, or any other provision of law, expenditures of the insurance fund shall not be subject to the supervision or approval of any other officer or division of state government. However, the agency’s budget respecting the insurance fund shall be prepared and reviewed in accordance with Section 50913.

(d) The agency shall, from time to time, direct the Treasurer to invest moneys in the insurance fund which are not required for its current needs in eligible securities designated by the agency from among those specified in Section 16430 of the Government Code or as otherwise permitted by law. The agency may direct the Treasurer to deposit moneys in the insurance fund in interest-bearing accounts in state or national banks or other financial institutions having principal offices in this state. To the extent permitted by law, the agency may invest moneys in the fund in obligations of financial institutions, as permitted by board resolution. The agency may also require the transfer of moneys in the insurance fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code.


text:
(a) The agency is hereby vested with full power, authority, and jurisdiction over the insurance fund. The agency may perform all acts necessary or convenient in the exercise of any power, authority, or jurisdiction over the insurance fund, either in the administration thereof or in connection with the business administered under this part, as fully and completely as the governing body of a private insurance carrier.

(b) The agency may create task forces and advisory committees, when appropriate and as the members deem necessary, for the purpose of obtaining advice on issues arising as a result of the agency’s activities under this part. Ex officio members of those task forces and advisory committees may include, but are not limited to, the Insurance Commissioner or his or her designee, the Director of Housing and Community Development or his or her designee, the Director of the Seismic Safety Commission or his or her designee, and the Director of Emergency Services or his or her designee.

history: (History: Amended by Stats. 2013, Ch. 352, Sec. 381. (AB 1317) Effective September 26, 2013. Operative July 1, 2013, by Sec. 543 of Ch. 352.)


text:
(a) Division 10 (commencing with Section 7920.000) of Title 1 of, and Article 9 (commencing with Section 11120) of Chapter 1 of, Chapter 3.5 (commencing with Section 11340) of, Chapter 4 (commencing with Section 11370) of, and Chapter 5 (commencing with Section 11500) of, Part 1 of Division 3 of Title 2 of, the Government Code shall apply to the agency with respect to the administration of the insurance fund.

(b) Notwithstanding subdivision (a), the provisions described in that subdivision shall not apply to any of the following:

(1) The agency’s activities and records relating to establishing rates and premiums.

(2) Bids or contracts for insurance, coinsurance, and reinsurance.

(3) Other matters necessary to maintain the competitiveness of the agency in the mortgage insurance industry, including, but not limited to, the development of financial products.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 265. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)


text: The state shall not be liable beyond the assets of the insurance fund for any obligations in connection therewith.


text:
In conducting the business and affairs of the insurance fund, the executive director may do any of the following:

(a) Enter into contracts of insurance.

(b) Decline to insure any risk in which the minimum requirements of the insurance fund are not complied with, or which is beyond the safe carrying of the insurance fund.

(c) Reinsure any risk or any part thereof.

(d) Make rules for the settlement of claims against the insurance fund and determine to whom and through whom the payments are to be made.

(e) Enter into any contracts or obligations relating to the fund.

(f) Invest and reinvest the moneys belonging to the fund as provided by this part or Part 3 (commencing with Section 50900).

(g) Conduct all business and affairs and perform all acts relating to the fund whether or not specifically designated in this part.


text:
(a) The agency may contract with any private person or public agency for review of the administration of this part and for assistance in implementing this part.

(b) The agency shall prepare a biennial report on the condition of the program of loan and bond insurance authorized by this part. The report of the evaluation shall include an evaluation of program effectiveness in relation to cost and shall include recommendations and suggested legislation for the improvement of the program, if any. The agency shall obtain an annual agreed-upon procedures engagement of the insurance fund’s books and accounts with respect to its activities under this part to be made at least once for each calendar year by an independent certified public accountant. A copy of the annual agreed-upon procedures engagement and biennial report shall be transmitted to the Governor, to the chairperson and vice-chairperson of the Senate and Assembly housing policy committees, the Senate and Assembly budget committees, and the Joint Legislative Budget Committee, and made available for review by interested parties no later than November 1 of each year for the annual agreed-upon procedures engagement and November 1 biennially for the program evaluation report.

(c) For purposes of this section, the agreed-upon procedures engagement shall be conducted in accordance with the Statements on Standards for Attestation Engagements Number 10, as issued by the American Institute of Certified Public Accountants.

history: (History: Amended by Stats. 2016, Ch. 32, Sec. 85. (SB 837) Effective June 27, 2016.)


text:
(a) The California Housing Loan Insurance Fund, as provided for pursuant to Section 51653 as it read prior to the effective date of the act that adds this part, is continued in existence, and, pursuant to Section 51603, is referred to as the insurance fund. Notwithstanding Section 13340 of the Government Code, all money in the insurance fund is hereby continuously appropriated to the agency without regard to fiscal year for the purpose of insuring loans and bonds pursuant to this part and for the purpose of defraying administrative expenses incurred by the fund in operating those programs of loan and bond insurance. All insurance premiums shall be deposited in the insurance fund.

(b) The insurance fund shall be administered by the agency for the purpose of insuring loans and bonds as provided in this part. Any appropriation made therefrom or thereto before the effective date of this section shall continue to be available for the purposes for which it was made.


text:
(a) The agency shall prepare a preliminary budget for the agency’s activities under this part on or before December 1 of each year for the ensuing fiscal year, to be reviewed by the Secretary of Business, Consumer Services and Housing, the Director of Finance, and the Joint Legislative Budget Committee.

(b) This section shall become inoperative on July 1, 2026, and, as of January 1, 2027, is repealed.

history: (History: Amended by Stats. 2026, Ch. 28, Sec. 91. (SB 170) Effective June 29, 2026. Inoperative July 1, 2026, by its own provisions.\n Repealed as of January 1, 2027, by its own provisions. See later operative version added by Sec. 92 of Stats. 2026, Ch. 28.)


text:
(a) The agency shall prepare a preliminary budget for the agency’s activities under this part on or before December 1 of each year for the ensuing fiscal year, to be reviewed by the Secretary of California Housing and Homelessness, the Director of Finance, and the Joint Legislative Budget Committee.

(b) This section shall become operative on July 1, 2026.

history: (History: Repealed (in Sec. 91) and added by Stats. 2026, Ch. 28, Sec. 92. (SB 170) Effective June 29, 2026. Operative July 1, 2026, by its own provisions.)


text:
(a) The agency shall cause all moneys in the insurance fund which are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) of Chapter 2 of Part 2 of Division 1 of the Insurance Code.

(b) All interest or other increment resulting from the investment shall be deposited in the insurance fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the insurance fund shall not be subject to transfer to any other fund pursuant to Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except the Surplus Money Investment Fund.


text: The insurance fund shall be organized as a public enterprise fund.


text: The assets of the insurance fund shall be applicable to the payment of losses sustained on account of insurance and to the payment of the salaries and other expenses charged against it in accordance with this part.


text: The agency shall, after a reasonable time during which it may establish a business, be competitive with other insurers, and it is the intent of the Legislature that the insurance fund shall ultimately become neither more nor less than self-supporting. However, this section shall not be construed to preclude the insurance fund from operating in a manner that will permit the agency to create additional reserves from operations in order that the agency can maximize its insurance capacity.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 5. Effective January 1, 2004.)


text: Claims arising out of activities of the agency on behalf of the insurance fund pursuant to this part are exempted from the provisions of Part 3 (commencing with Section 900) of Division 3.6 of Title 1 of the Government Code.


text: Except as provided in this part, the agency, on behalf of the insurance fund pursuant to this part, shall not be subject to the provisions of the Government Code made applicable to state agencies generally or collectively, unless the section specifically names the fund as an agency to which the provision applies.


text: With respect to the administration of the insurance fund, the agency shall be subject to the provisions of Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1 of, and Division 5 (commencing with Section 18000) of Title 2 of, the Government Code, and any other personnel management provisions in law that are generally applicable to state employees. Notwithstanding subdivision (e) of Section 3513 of the Government Code, up to five positions of the insurance fund of the agency may be designated as managerial under Section 18801.1 of the Government Code. All other position designations in the insurance fund of the agency are subject to Sections 3513 and 18801.1 of the Government Code. In making these designations, consideration shall be given to the agency’s need and continued ability to attract and maintain qualified individuals within the insurance fund.


text: The agency shall establish reserve accounts for unearned premiums, losses, and potential catastrophic losses caused by economic cycles. The agency shall not cause sums to be withdrawn from the loan insurance reserve account in amounts which would reduce the moneys therein to less than the insurance reserve requirement, except as necessary to satisfy liabilities arising under contracts of loan insurance. In the event that the loan insurance reserve account is reduced to less than the insurance reserve requirement, the agency shall cease making commitments for, and contracts of, insurance until the loan insurance reserve account has been restored to satisfy that requirement.


text: There is hereby continued in existence a bond insurance reserve account in the insurance fund to secure commitments under contracts to insure bonds. The agency shall take all reasonable steps to ensure that the bond reserve account is continuously maintained at not less than the bond reserve requirement. The agency shall not cause sums to be withdrawn from the bond insurance reserve account in amounts which would reduce the moneys therein to less than the bond reserve requirement, except as necessary to satisfy liabilities arising under contracts of bond insurance. In the event that the bond insurance reserve account is reduced to less than the bond reserve requirement, the agency shall cease making contracts of bond insurance until the account has been restored to satisfy that requirement.


text: The agency may create other accounts within the insurance fund as it deems are necessary or convenient to carry out the purposes of this part.


text:
(a) The obligation of the agency and of the state to pay any insurance benefit pursuant to contracts of insurance insuring loans or bonds shall not exceed amounts deposited in the insurance fund that are made available therefor under the respective contracts of insurance. Nothing in this part shall require the Legislature to appropriate moneys from the General Fund in the State Treasury to the insurance fund on account of these obligations. The insurance of loans or bonds under this part shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment.

(b) All contracts of insurance insuring loans or bonds pursuant to this part shall contain on the face thereof a statement to the following effect: “Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this contract of insurance.”

(c) Moneys in the insurance fund received from the proceeds of bonds issued pursuant to the California Housing and Jobs Investment Bond Act may not be transferred to any other fund of the agency except as necessary to pay the expenses of operating the program of loan and bond insurance for single-family residential housing authorized by this part, nor shall the agency utilize any of these moneys under the direction and control of the agency, other than moneys in the insurance fund, to satisfy liabilities arising from contracts of insurance authorized by this part.

(d) Moneys in the insurance fund may not be transferred to any other fund of the agency except as necessary to pay the expenses of operating the program of loan and bond insurance authorized by this part, nor shall the agency utilize any moneys under the direction and control of the agency to satisfy liabilities arising from contracts of insurance authorized by this part.

(e) The agency, on behalf of, or for the benefit of, the California Housing Loan Insurance Fund, may borrow or receive moneys from the agency or from any federal, state, or local agency or private entity, or may pledge funds from the California Housing Finance Fund, in order to create or support reserves in the insurance fund for loan or bond insurance as provided in this part and as authorized by resolution of the board of directors.

(f) The agency shall create a separate reserve account for insuring mortgages of multifamily housing developments which shall consist of all of the following:

(1) Funds transferred by redevelopment agencies pursuant to Section 33334.2. The use of these funds shall be consistent with Section 33334.4.

(2) Any other funds available for insuring mortgages of multifamily housing developments as may be made available for that purpose by law and as provided in this part.

(g) Reserve funds for the single-family mortgage guarantee insurance program and the multifamily residential mortgage guaranty insurance program shall not be commingled.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 6. Effective January 1, 2004.)


text: The agency shall not be required to pay any tax or assessment on any property owned by the fund or upon the income therefrom.


text:
(a) The agency shall be subject to, and comply with, the same reserve certification requirements as mortgage guaranty insurers who are licensed pursuant to Chapter 2A (commencing with Section 12640.01) of Part 6 of Division 2 of the Insurance Code.

(b) The agency shall not otherwise be subject to the Insurance Code with respect to the operation of the insurance fund, except as provided in this part.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 7. Effective January 1, 2004.)


text: The agency shall establish priorities for the allocation of loan-insurance assistance in accordance with the purposes and general provisions of Chapter 2 (commencing with Section 50950) of Part 3 of this division and Article 6 (commencing with Section 51225) of Chapter 5 of Part 3 of this division, in compliance with the needs identified in the California Statewide Housing Plan, and as provided in this part.

chapter: 3. Program Priorities

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 3. Program Priorities


text: The agency shall establish and maintain separate accounts in the insurance fund for a single-family mortgage guaranty insurance program and a multifamily residential mortgage guaranty insurance program. Each program shall be actuarially sound and shall be capitalized through separate insurance funds.


text:
While maintaining the actuarial soundness of the fund, the agency shall make efforts to do both of the following:

(a) Equitably distribute insurance based on a regionalized basis, weighted in accordance with the geographic distribution of the state’s population.

(b) Focus on housing opportunities that benefit any of the following:

(1) Households with incomes at or below area median income.

(2) Households that require mortgages at or above 95 percent of the price of the home.

(3) Households that are participating in locally administered housing programs.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 9. Effective January 1, 2004.)


text:
(a) (1) To be qualified for loan insurance, a borrower shall be, or by reason of a loan insured pursuant to this part shall become, the owner of a multifamily rental housing development or a single-family residential structure for which an insured loan is authorized, and shall be able to bear the usual expenses of maintaining the housing development, development, or structure and repay the loan.

(2) To be qualified for loan insurance on a single-family residential housing unit, the borrower shall also do either of the following:

(A) Qualify as a person or family of low or moderate income, as that term is defined in Section 51603.

(B) Until January 1, 2011, otherwise meet the requirements for participation in an affordable housing program or product offered by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Association (Freddie Mac).

(3) The agency may, by resolution, establish additional requirements that it deems necessary to accomplish the purposes of this part.

(b) For the purpose of increasing the efficiency and minimizing the cost of the loan insurance program, the agency may insure or issue commitments to insure loans upon the certification of an officer of an approved lending institution that the borrower is qualified for loan insurance according to eligibility requirements specified by the agency.

(c) No later than January 1, 2009, the agency shall report to the chairs of the housing committees of the Senate and the Assembly on the types of programs that were offered pursuant to subparagraph (B) of paragraph (2) of subdivision (a).

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 10. Effective January 1, 2004.)

chapter: 4. Loan Insurance

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 4. Loan Insurance


text:
(a) The agency shall specify the percentage of the outstanding principal indebtedness that may be insured under this part with respect to each category of loan authorized to be insured under this part.

(b) The agency may insure loans secured by mortgages or deeds of trust of first or second priority.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 11. Effective January 1, 2004.)


text:
Loans insured under this part shall meet all of the following requirements:

(a) The loans shall be made for a period acceptable to the agency not to exceed 40 years.

(b) The loans shall be subject to maximum loan amounts for each category of loan authorized to be insured under this part.

(c) The loans shall be secured by mortgages or deeds of trust, or the loan shall be wholly or partially insured or guaranteed by an agency or instrumentality of the United States, except for property improvement loans under limits established by the agency.

(d) The agency may establish loan-to-value limitations for each category of loan and may set forth limitations on the further encumbrance of structures and other real property securing loans, but only to the extent necessary to prevent unreasonable impairment of the agency’s security. In no case involving refinancing and rehabilitation shall the loan have a principal obligation in an amount exceeding the sum of the estimated cost of rehabilitation, if any, and the amount required to refinance existing indebtedness secured by the property and settlement and closing costs incurred in connection therewith.

(e) Loans involving the rehabilitation of residential structures shall have a principal obligation not exceeding an amount which, when added to any outstanding indebtedness constituting a lien upon the property securing the loan, creates a total outstanding indebtedness which would be reasonably secured by a mortgage of first priority on the property pursuant to subdivision (d), and as set forth by the agency.

(f) Loans involving refinancing may be insured only if refinancing is necessary to permit a borrower to afford the cost of rehabilitation, to lower his or her monthly debt-to-income payments, minimize rent increases for occupants of the residential structure, where the rents would otherwise exceed affordable rents due to the expense of rehabilitation, or to achieve another purpose specified in this division.

(g) With respect to loans involving the rehabilitation of a residential structure, the agency shall determine that the rehabilitation is economically feasible. For purposes of this subdivision, the economic feasibility of rehabilitation projects involving commercial space in a mixed residential and commercial structure shall be determined independently for any structure to be rehabilitated for mixed residential and commercial uses.

(h) For the purpose of increasing the efficiency and minimizing the cost of the loan insurance program, the agency may insure, or issue commitments to insure, loans, upon the certification of an officer of an approved lending institution that the proposed rehabilitation conforms to requirements specified by the agency regarding economic feasibility.

(i) The agency shall contract with the insured or the borrower, or both, during the term of the insurance if the agency determines that either or both of those contracts is necessary to maintain residential rentals available to lower income households at affordable rents.

(j) Relocation payments shall be made to persons and families displaced in making a site or residential structure available for rehabilitation or construction financed by loans insured under this part, and relocation advisory assistance provided to those persons, as specified by Section 51063. Relocation payments for rehabilitation or construction financed by loans insured by this part, shall also be made to owners involuntarily displaced because of inability to afford costs of compliance required pursuant to this part, but any payment pursuant to Section 4623 of Title 42 of the United States Code or Section 7263 of the Government Code shall be limited to the reasonable costs of a replacement dwelling adequate to accommodate the displaced person or family without regard to whether the dwelling is otherwise comparable to the dwelling formerly occupied, less the amount received from sale of the dwelling. Relocation payments may be made from the proceeds of insured loans as authorized by the agency.

(k) The residential structure for which a loan is insured pursuant to this part shall be insured against loss due to fire and other causes, as provided by the agency.

( l) Any other terms and conditions as the agency determines are necessary to further the purposes of this part.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 12. Effective January 1, 2004.)


text:
Notwithstanding any other provision of law, any rental housing development which is financed from mortgages insured pursuant to this part is exempt from both of the following:

(a) Any local government prohibitions against condominium conversion any time after 10 years from the date a certificate of occupancy is issued. Any condominium conversion shall be made in accordance with the requirements of Article 2.5 (commencing with Section 66452.50) of Chapter 3 of Division 2 of Title 7 of the Government Code.

(b) Any rent control, except for units made available to lower income households as provided pursuant to subdivision (b) of Section 51226.


text:
The agency may provide insurance pursuant to this part for all of the following:

(a) Loans for residential structures that will be occupied primarily by persons and families of low or moderate income.

(b) Loans for privately or publicly financed rental housing developments that will benefit lower income households. “Privately financed rental housing development,” as used in this subdivision, includes rental housing developments financed by local public entities, as defined in Section 50079.

(c) Loans that otherwise meet the requirements for participation in an affordable housing program or product offered by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Association (Freddie Mac).

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 13. Effective January 1, 2004.)


text: Subject to this part, the agency may insure or guarantee loans made by qualified mortgage lenders for the purposes described in Section 51320.


text: Notwithstanding any other provision of this part, the agency may establish a program of insuring reverse mortgages as authorized by resolution of the board.


text:
(a) The agency shall establish, and may from time to time revise, after public hearings, a schedule of insurance premium rates. The premiums may vary according to the category of the loan and the degree of risk related to the loan. Premiums shall be calculated in an amount which, when added to the other revenues of the insurance program, will be adequate to defray losses occasioned by defaults and the operating expenses of the program, to repay amounts advanced to the agency for purposes of this part, and gradually to expand the insurance availability of the program. Approved lending institutions shall remit premiums to the fund at intervals specified by the agency.

(b) The agency may prescribe other charges that it finds necessary, including service charges and appraisal, inspection, and other fees.


text:
(a) The agency shall establish procedures to be followed by approved lending institutions in the event of default on a loan insured under this part. The agency may require that, prior to submitting a claim, an approved lending institution shall foreclose or exercise a power of sale and take possession of the property or otherwise acquire title and possession of the property within the time specified by the agency. The agency may, upon submission of the claim, pursue one of the following alternatives:

(1) Pay the approved lending institution the benefit of the insurance.

(2) Upon conveyance to the agency of all the right, title, and interest of the approved lending institution in the foreclosed property and the assignment of all claims of the approved lending institution against the defaulting borrower to the agency, pay to the qualified mortgage lender the sum of the unpaid principal balance of the loan, foreclosure costs, accrued interest, and other costs defined by contract.

(3) Pay a partial claim prior to foreclosure by agreement with the insured.

(b) In any case in which the agency has insured only a portion of the outstanding principal indebtedness of a loan, it may further provide that not more than an equivalent percentage of the total accrued interest and costs shall be payable by the agency pursuant to this section in the event of a default.


text: In the event of a default on an insured loan not secured by a first mortgage, the agency may, in lieu of proceeding under Section 51658, acquire the insured loan and any security therefor upon payment to the approved lending institution of an amount equal to the unpaid principal balance of the loan, accrued interest, and other costs that the agency finds are fair, reasonable, and authorized.


text: The agency may initiate programs of coinsurance or reinsurance with, and may procure reinsurance from, any state agency, local agency, agency of the United States, or private mortgage insurer in order to accomplish more effectively the purposes of this part. The agency may coinsure or reinsure loans made or originated by approved lending institutions which are otherwise insurable under this part.


text: The agency may provide for, and require attendance at, homeownership counseling and training courses as a condition to the insurance of loans for the purchase or refinancing of residential structures under this part.


text: The agency may commence any action to protect or enforce any right conferred upon it by any law, mortgage, contract of insurance, or any other agreement. The agency may bid for and purchase property sold in satisfaction thereof at any foreclosure or other sale or may otherwise acquire and take possession of that property.


text:
(a) The agency may insure bonds issued by state or local agencies, or other types of issuers approved by the board of directors of the agency, to finance or refinance the construction, rehabilitation, acquisition, or preservation of single-family and multifamily residential housing for persons and families of low and moderate income. The agency may charge and collect insurance premiums for the insurance and fees for services performed in conjunction with the processing and approval of insurance applications as determined by the agency. The agency shall take all reasonable steps to ensure that bonds insured pursuant to this chapter are in a form satisfactory to the agency and contain provisions relating to the underlying security for the bonds as may be required by the agency.

(b) The agency shall take reasonable steps to ensure that both of the following occur:

(1) The bonds contain, or are subject to, terms respecting repayment, dates of maturity, and other provisions satisfactory to the agency.

(2) The bonds contain, or are subject to, provisions that the agency deems necessary with respect to security interests of the agency, including provisions relating to subrogation, liens and releases of liens, payment of taxes, escrow or trusteeship requirements, or other matters.

history: (History: Amended by Stats. 2003, Ch. 553, Sec. 14. Effective January 1, 2004.)

chapter: 5. Bond Insurance

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 5. Bond Insurance


text:
The agency may insure bonds pursuant to this chapter only if it determines that the proceeds of the bonds will be utilized, to the maximum extent feasible, for one of the following purposes:

(a) Construction or rehabilitation of multifamily rental housing for persons and families of low or moderate income.

(b) Construction or rehabilitation of housing that utilizes federal rental or other subsidies.

(c) Construction or rehabilitation of other dwelling units for persons and families of low or moderate income.


text: The agency may administer a loan loss guarantee program in order to induce private lenders to make construction loans for seismic rehabilitation improvements which are designed to increase seismic structural safety in accordance with a plan developed by a civil engineer, structural engineer, or an architect for a property which has been identified by a local jurisdiction as being potentially hazardous, as defined in Chapter 12.2 (commencing with Section 8875) of Division 1 of Title 2 of the Government Code, or as being hazardous in the event of an earthquake, as defined in Article 4 (commencing with Section 19160) of Chapter 2 of Part 3 of Division 13.

history: (History: Added by Stats. 1993, Ch. 115, Sec. 4. Effective July 15, 1993. Conditionally inoperative as provided in Section 51687.)

chapter: 6. Loan Loss Guarantee Program

path: 31. HOUSING AND HOME FINANCE > 4. BOND AND LOAN INSURANCE > 6. Loan Loss Guarantee Program


text:
(a) Except as provided in subdivision (b), the agency shall only issue rehabilitation loan loss guarantees on single-family homes or on buildings with five or more residential units and where any commercial use in those buildings is limited to the basement and ground floors or where the commercial use occupies less than 15 percent of the total square footage of the building.

(b) For the purpose of using the program enacted by this chapter in conjunction with the multifamily seismic retrofit program authorized by Section 50668.5, the 15-percent limitation on commercial space required by subdivision (a) may be waived in order to facilitate the seismic retrofit of lower income housing.


text: The agency may issue a loan loss guarantee in the amount of 25 percent of the actual loss of a loan guaranteed under this section. The fund may not guarantee any loan loss in excess of the amount of permanent loan financing for the property. No guarantee shall be made for a property which does not have a binding, unconditional, permanent financing commitment from a lender acceptable to the agency, nor for a property in which the owner has less than a 20-percent equity interest.


text:
(a) The agency shall collect a premium for a loan loss guarantee as provided in Section 51657. All premiums shall be deposited in the Seismic Rehabilitation Loan Loss Guarantee Account within the insurance fund, which is hereby created.

(b) Premiums shall be calculated in an amount which, when added to the other revenues of the account, will be adequate to, in the following order of priority: pay losses on claims made under loan loss guarantees issued hereunder, pay actual operating costs of the program, and repay moneys transferred to the account pursuant to Section 51685. The agency is authorized to transfer from the account actual operating expenses necessary for its administration of this program. Any excess premiums shall be retained in the account and used to expand the loan loss guarantee program hereunder.

(c) Moneys in the account shall be segregated from other moneys of the insurance fund and shall not be transferred from the account for any purpose, except as provided in this chapter. Loan loss guarantees issued by the agency for the benefit of either construction lenders or borrowers shall specify that only the moneys in the account are available to pay claims under loan loss guarantees and that the other assets of the insurance fund, the assets of the agency, and the assets of the State of California are not available to pay claims or damages resulting from loan loss guarantees.


text: Moneys transferred to the insurance fund under this section may be used to create reserves for loan loss guarantees authorized by this chapter and for the initial administrative expenses of the program which are not offset by premium income.


text:
(a) Notwithstanding any other provision of law, the California Housing Insurance Fund may borrow one million eight hundred thousand dollars ($1,800,000) from the Local Agency Indebtedness Fund, established pursuant to Article 6.5 (commencing with Section 16496) of Chapter 3 of Division 4 of Title 2 of the Government Code, for the purpose of establishing the Seismic Rehabilitation Loan Loss Guarantee Account within the fund as authorized by subdivision (d) of Section 51642.

(b) Upon request of the agency, the Pooled Money Investment Board shall transfer from the Local Agency Indebtedness Fund amounts authorized hereunder and upon terms and conditions to which the agency and the board shall agree. Moneys borrowed hereunder shall constitute a loan, which shall be repaid with simple interest accrued at the pooled money investment rate exclusively from premium income collected by the agency for seismic rehabilitation loan loss guarantees issued under this chapter. No other moneys of the agency shall be liable for repayment of the loan from the Local Agency Indebtedness Fund. The loan authorized, along with accrued interest, shall be due and payable not later than one year from the date of expiration of the last outstanding loan loss guarantee issued, or not later than January 1, 2010, whichever comes first, or unless the Legislature extends the sunset provision of this program because of the success and continuing need for the program.

(c) Moneys transferred to the agency under this section may be used to create reserves for loan loss guarantees authorized by this chapter and for the initial administrative expenses of the program which are not offset by premium income.


text: In addition to the powers expressly granted by this chapter, the agency shall have all the powers granted under this part in administering this program which are not inconsistent with this chapter.


text: This chapter shall be inoperative if moneys are not transferred to the fund pursuant to Section 51685.5 for the purposes defined in Section 51680.

history: (History: Added by Stats. 1993, Ch. 115, Sec. 4. Effective July 15, 1993. Note: Termination clause affects Chapter 6, commencing with Section 51680.)


text:
The Legislature finds and declares that the subject of housing is of vital importance to the health, safety, and welfare of the residents of this state, for the following reasons:

(a) Decent housing is an essential motivating force in helping people achieve self-fulfillment in a free and democratic society.

(b) Unsanitary, unsafe, overcrowded, or congested dwelling accommodations constitute conditions which cause an increase in and spread of, disease and crime.

(c) A healthy housing market is one in which residents of this state have a choice of housing opportunities and one in which the housing consumer may effectively choose within the free marketplace.

history: (History: Added by Stats. 1979, Ch. 1069.)

part: 5. LOCAL HOUSING FINANCE AGENCIES

path: 31. HOUSING AND HOME FINANCE > 5. LOCAL HOUSING FINANCE AGENCIES > 1. Legislative Findings and Declarations


text: The Legislature finds and declares that there exists within the state a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for single-family purchases for those persons unable to compete for mortgage financing in the conventional mortgage market.

chapter: 1. Legislative Findings and Declarations


text: The Legislature finds and declares that it is necessary and essential that counties and cities be authorized to directly or indirectly make long-term, low-interest loans to persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes in order to encourage investment and upgrade local areas.


text: The Legislature finds and declares that in order to preserve a healthy housing market and avoid a two-tier market where publicly subsidized mortgage capital supplants mortgage capital supplied by private financial institutions, it is necessary for the lending programs of cities and counties to be sufficiently targeted to avoid competition with private sector mortgage lenders, and further that revenue bond financing of mortgage lending by cities and counties be reasonably constrained to avoid disruption of bond markets and the credit standing of the state and its political subdivisions.


text: The Legislature finds and declares that the present shortage of decent, safe, and sanitary housing available to potential purchasers in the lower end of the buying spectrum is particularly inimical to the health of the housing economy and, with few exceptions, beyond the capability of private enterprise acting alone to cure, and a public purpose is served by public-private efforts to reduce cost of financing single-family homes for this class of purchasers.


text: The Legislature finds and declares that the revenue bonds provided for in this part are to be used to complement and not compete with home loans made from private sector sources, so as to substantially lower the cost of single-family home financing and meet a demand for housing financing which cannot otherwise be met.


text: The Legislature finds and declares that the authority to issue revenue bonds to aid in the financing of home purchase is needed in the cities and the counties of the state and that it is in the public interest and serves a public purpose by providing financing for decent, safe, and sanitary housing that people in the lower end of the purchasing spectrum can afford and is a function pertaining to the government and affairs of the cities and the counties of the state.


text: The Legislature finds and declares that the establishment of basic procedures for the issuance of revenue bonds to finance the purchase of residential housing and the costs of home ownership is necessary and desirable to provide clarity in law and direction for subsequent actions.