BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 697 
                                                                  Page  1

          Date of Hearing:   April 27, 2011

               ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
                                 Norma Torres, Chair
                AB 697 (V. Manuel Perez) - As Amended:  April 4, 2011
           
          SUBJECT  :   Veteran: acquisition of home: interest of record.

           SUMMARY  :   Allows the CalVet Home Loan Program (CalVet) within 
          the California Department of Veterans Affairs (CDVA) to 
          refinance existing mortgage loans. Specifically,  this bill  :  

          1)Allows CDVA to acquire a home in which the veteran has an 
            interest of record for the purpose of refinancing an existing 
            mortgage loan.

          2)Specifies that funds used by CDVA for refinancing existing 
            mortgage loans shall be used in accordance with federal laws 
            and regulations governing the use of qualified mortgage bonds 
            and qualified veterans' mortgage bonds.

          3)Requires CDVA to adopt and publish any rules and regulations 
            necessary to allow CalVet to refinance existing mortgage 
            loans.

           EXISTING LAW  

          1)Provides for farm and home purchase benefits for qualifying 
            veterans under the Veterans' Farm and Home Purchase Act of 
            1974 and subsequent acts, which are collectively referred to 
            as the CalVet Home Loan Program (Military and Veterans Code 
            Section 987.50, et seq.).

          2)Allows the CalVet program to be used to acquire a home in 
            which the veteran has an interest of record only in limited 
            circumstances, including:

             a)   Where the application is for aid for the construction of 
               a home upon real property owned by the applicant and the 
               improvements to be constructed thereon have not reached 
               completion as evidenced by the issuance of a certificate of 
               occupancy.

             b)   Where the veteran had no interest of record in the 
               property at the time of filing his or her application and 








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               thereafter secured interim financing pending the processing 
               and approval of the application by the department.

             c)   Where the application is for the purchase of a 
               mobilehome to be situated upon real property, or an 
               undivided interest therein, owned by the applicant.

             d)   Where the applicant is an Indian veteran and the 
               application is for the construction of a dwelling house or 
               other improvements on, or for the purchase of a mobilehome 
               to be sited on, trust land in which the Indian veteran has 
               a beneficial interest or owns an interest of record.

             e)   Where the application is for assistance to enable the 
               veteran to purchase his or her space or share in a 
               mobilehome park that is converted from a rental park to a 
               nonprofit corporate resident-owned park or subdivision, 
               cooperative, or condominium for mobilehomes, in which the 
               veteran resides in his or her mobilehome. 

            (Military and Veterans Code Section 987.85)

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

          The CalVet Home Loan Program, operated by the California 
          Department of Veterans Affairs, offers home loans to qualified 
          veterans at competitive interest rates with a low or no down 
          payment. The program provides loans for single-family 
          residences, including condominiums and planned unit 
          developments; farms; units in cooperative developments; and 
          mobilehomes in rental parks or on land owned by the veteran. 
          Properties purchased with a CalVet loan must be owner-occupied 
          and located in the state. 

          Funding for the CalVet program comes primarily from general 
          obligation bonds that are repaid through monthly mortgage 
          payments. The program has no General Fund costs. Voters have 
          passed 23 veterans bonds since 1943 to provide funding for 
          CalVet. The last veterans' bond to pass was Proposition 12 in 
          2008, which authorized $900,000,000 in bonds for the program.  

          Under current law, CalVet can only be used to purchase a new 
          property that the veteran does not already own, with a few 








                                                                  AB 697 
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          narrow exceptions. It cannot assist a veteran who already owns a 
          home but who may want to refinance his or her mortgage.  AB 697 
          would change this to allow CalVet to refinance existing 
          mortgages that are currently held by another bank, thus 
          expanding the number of veterans who could take advantage of the 
          program.

           Double referred  :  The Assembly Committee on Rules referred AB 
          697 to the Committee on Veterans Affairs and Housing and 
          Community Development.  This bill is schedule to be heard in the 
          Committee on Veterans Affairs on April 26, 2011.
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Legion-Department of California
          AMVETS-Department of California
          California Association of County Veterans Service Officers
          California State Commanders Veterans Council
          Vietnam Veterans of America-California State Council

           Opposition 
           
          None on file
           
          Analysis Prepared by :    Anya Lawler / H. & C.D. / (916) 
          319-2085