BILL NUMBER: AB 672 CHAPTERED 09/22/04 CHAPTER 674 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2004 APPROVED BY GOVERNOR SEPTEMBER 22, 2004 PASSED THE ASSEMBLY AUGUST 19, 2004 PASSED THE SENATE AUGUST 16, 2004 AMENDED IN SENATE AUGUST 10, 2004 AMENDED IN SENATE JULY 20, 2004 AMENDED IN SENATE JUNE 14, 2004 AMENDED IN SENATE MAY 25, 2004 AMENDED IN ASSEMBLY JANUARY 22, 2004 AMENDED IN ASSEMBLY JANUARY 5, 2004 INTRODUCED BY Assembly Member Montanez (Coauthors: Assembly Members Dymally, Lieber, Mullin, and Wiggins) (Coauthors: Senators Ashburn, Florez, and Kuehl) FEBRUARY 19, 2003 An act to amend Section 51504 of the Health and Safety Code, relating to affordable housing, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 672, Montanez. Housing: downpayment assistance and mortgages. (1) Existing law establishes the California Homebuyer's Downpayment Assistance Program administered by the California Housing Finance Agency to assist first-time low- and moderate-income homebuyers. It requires downpayment assistance to include, but not be limited to, a deferred-payment, low-interest, junior mortgage loan and limits the amount of downpayment assistance to 3% of the home's sales price. This bill would authorize the amount of downpayment assistance to not exceed 5% of the purchase price or the appraised value, whichever is less, of a home within an infill opportunity zone, a transit village development district, or a transit-oriented development specific plan area, as defined. The bill would make an appropriation by authorizing the expenditure for a new purpose of moneys in the Self-Help Housing Fund that are continuously appropriated by the Housing and Emergency Shelter Trust Fund Act of 2002 for purposes of the California Homebuyer's Downpayment Assistance Program. (2) This bill also would incorporate additional changes in Section 51504 of the Health and Safety Code proposed by AB 2838, to be operative if AB 2838 and this bill are both enacted and become effective on or before January 1, 2005, and this bill is chaptered last. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 51504 of the Health and Safety Code is amended to read: 51504. The agency shall administer a downpayment assistance program that includes, but is not limited to, all of the following: (a) 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 homebuyers. (b) (1) Except as provided in paragraph (2), the amount of downpayment assistance shall not exceed 3 percent of the home sales price. (2) 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 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) 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. (d) 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. (e) The agency may use up to 5 percent of the funds appropriated by the Legislature for purposes of this chapter to administer this program. (f) For the 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. SEC. 2. Section 51504 of the Health and Safety Code is amended to read: 51504. The agency shall administer a downpayment assistance program that includes, but is not limited to, all of the following: (a) 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 homebuyers. (b) (1) Except as provided in paragraph (2) or (3), the amount of downpayment assistance shall not exceed 3 percent of the home sales price. (2) 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 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. (3) Notwithstanding paragraph (1), the agency may, but is not required to, provide downpayment assistance that does not exceed 6 percent of the home sales price to first-time low-income homebuyers who, as documented to the agency by a nonprofit organization that is certified and funded to provide homeownership 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 homeownership 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. (c) 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. (d) 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. (e) The agency may use up to 5 percent of the funds appropriated by the Legislature for purposes of this chapter to administer this program. (f) For the 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. SEC. 3. Section 2 of this bill incorporates amendments to Section 51504 of the Health and Safety Code proposed by both this bill and Assembly Bill 2838. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2005, (2) each bill amends Section 51504 of the Health and Safety Code, and (3) this bill is enacted after Assembly Bill 2838 in which case Section 1 of this bill shall not become operative.