BILL ANALYSIS Ó
AB 1797
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1797 (Torres)
As Amended June 26, 2012
Majority vote
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|ASSEMBLY: |51-26|(May 29, 2012) |SENATE: |23-15|(August 22, |
| | | | | |2012) |
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Original Committee Reference: H. & C.D.
SUMMARY : Authorizes the Department of Housing and Community
Development (HCD) to offer an interest rate below 3% on loans
under the Mobilehome Park Resident Occupancy Program (MPROP) and
authorizes HCD to provide technical assistance to applicants
under MPROP and include the reasonable costs of the assistance
as part of the loan principal.
The Senate amendments authorize HCD to contract with a qualified
non-profit entity to provide technical assistance to MPROP
applicants.
AS PASSED BY THE SENATE , this bill was substantially similar to
the version passed by the Assembly.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Unknown loss of interest, potentially in excess of $150,000
after several years (Mobilehome Park Purchase Fund), to the
extent HCD charges a lower interest rate. Actual impact would
depend upon actual rates charged, the repayment terms of the
loan, and volume of loans subject to lower rates.
2)Likely minor costs to HCD to provide, or contract for,
technical assistance on MPPF loans. Costs could be added to
loan principal and repaid through loan payments.
COMMENTS : The MPROP was created in 1984 to provide low-interest
loans to finance the conversion of mobilehome parks to resident
ownership. The program is funded through a $5 fee that certain
mobilehome owners pay along with their annual registration fee,
as well as through loan repayment. There is currently
approximately $14 million available under MPROP.
AB 1797
Page 2
Between 1985 and 2001, MPROP provided loans to assist with
conversion in 66 mobilehome parks around the state. Since 2002,
new loan activity under the program has slowed and activity
continues to decline. The program had no successful
applications in 2010 and only two in 2011. HCD indicates that
the increasing cost and complexity of park conversions are two
of the primary reasons for the reduction in the number of loan
applications.
This bill aims to increase utilization of MPROP by making
changes to the program. The bill gives HCD the flexibility to
offer a lower interest rate on MPROP loans, provided that doing
so would not jeopardize the overall stability of the Mobilehome
Park Purchase Fund. HCD already has statutory authority to
offer flexible repayment terms, but is bound by the 3% interest
rate that is set in law. HCD has indicated that they have had
applications that could have been successful at a lower interest
rate, primarily applications for loans from individual residents
who need assistance in purchasing their space in a
resident-owned park. In addition, this bill allows HCD to
provide technical assistance to loan applicants or contract with
a qualified non-profit to provide technical assistance and
include the costs as part of the loan principal.
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085
FN:
0004649