BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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  
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          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  







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          can demonstrate the capacity to operate the program through  
          some other means.  


          JJA:mel  5/5/05   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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