BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2087
                                                                  Page  1

          Date of Hearing:   April 28, 2010

                                Felipe Fuentes, Chair

                   AB 2087 (Torres) - As Amended:  April 19, 2010 

          Policy Committee:                              Veterans  
          AffairsVote: 9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              


          This bill expands the definition of "home," for purposes of the  
          CalVet Home Loan Program, to include a residence of two to four  
          units that otherwise meets specified requirements of the federal  
          Internal Revenue Code and is occupied only by veterans and their  

           FISCAL EFFECT  

          Expanding the types of dwellings that could be purchased under  
          the CalVet program could increase demand for loans.  The net  
          impact of this change on the Farm and Home Building Fund of 1943  
          is unknown, but could exceed $150,000 in any fiscal year. (The  
          fund consists of revenue bonds and self liquidating general  
          obligation bonds which are retired with payments from program  


           1)Background  .  The Cal-Vet loan program was established after  
            World War I to assist California war veterans in purchasing  
            farms and homes. Since 1922, the Legislature has passed, and  
            the voters have approved, 27 Cal-Vet bond issues totaling $9.3  
            billion. These bond funds have allowed Cal-Vet to assist over  
            420,000 veterans in purchasing farms and homes by providing  
            long-term mortgages. The most recent bond measure totaled $900  
            million and was approved in November 2008. Though these are  
            general obligation bonds backed by the full faith and credit  
            of the State of California, the Cal-Vet loan program is fully  


                                                                  AB 2087
                                                                  Page  2

            self-supporting.  The principal and interest on the bonds and  
            the administrative costs are repaid from interest charged to  
            the veteran loan holders.

           2)Purpose  .  AB 1330 (Salas)/Chapter 524 of 2009 authorized the  
            Department of Veterans Affairs to set up a pilot project for  
            the purpose of operating co-operative housing projects for  
            veterans. The DVA is sponsoring AB 2087 to add two- and four-  
            unit multifamily housing units to the statutory definition of  
            "home" because the department contends this change is  
            necessary to allow cooperative housing as a possible use under  
            the CalVET program. This bill is also intended to permit  
            veterans to collectively purchase a duplex or four-plex so  
            that they can live in a supportive environment.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081