BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 565| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 565 Author: Migden (D) Amended: 4/26/05 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 12-1, 5/3/05 AYES: Torlakson, Ashburn, Cedillo, Ducheny, Kehoe, Lowenthal, Machado, Maldonado, Margett, Murray, Runner, Simitian NOES: McClintock NO VOTE RECORDED: Soto SUBJECT : CalHome Program SOURCE : Author DIGEST : This bill removes the reference to existing programs in the CalHome intent language to allow the Department of Housing and Community Development to provide CalHome grants to public agencies and nonprofit developers who may not have an existing homeownership program, but have nevertheless demonstrated the capacity to operate one. ANALYSIS : The CalHome program is administered by the Department of Housing and Community Development (HCD) and provides grants and loans to public agencies and nonprofit corporations for projects or programs that enable low- and very low-income to become or remain homeowners. Grants may be used to fund the following activities: (1) first-time CONTINUED SB 565 Page 2 homebuyer down payment assistance, (2) home rehabilitation, (3) acquisition and rehabilitation, (4) homebuyer counseling, (5) self-help mortgage assistance, and (6) technical assistance for self-help homeownership. HCD may also make loans to public agencies or nonprofit developers for the following activities: (1) purchase of real property, (2) site development, (3) predevelopment, (4) construction expenses of homeownership development projects, and (5) permanent financing for mutual housing and cooperative developments. The CalHome statute provides that to be eligible to receive a grant or a loan, public agencies or nonprofit corporations must demonstrate sufficient organizational stability and capacity to carry out the activity for which they are requesting funds, including the capacity to manage a portfolio of individual loans over an extended period of time. The statute further allows that capacity may be demonstrated by substantial successful experience performing similar activities, or through other means acceptable to HCD. Language in the intent section of the statute states, "The purpose of the CalHome Program established by this chapter is to support existing homeownership programs?" Because of the reference to "existing programs," HCD has written its regulations to preclude applicants from applying for funds unless they currently offer the same or a substantially similar program, or have offered one for at least two of the previous four years. Further, the regulations do not provide an opportunity for the applicant to demonstrate capacity through other means. This bill removes the reference to "existing programs" in the CalHome intent language. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No ARGUMENTS IN SUPPORT : According to the author's office, by removing the reference to "existing programs," the author intends to ensure that applicants can apply to fund new programs, as well as existing programs, as long as they SB 565 Page 3 can demonstrate the capacity to operate the program through some other means. JJA:mel 5/5/05 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****