BILL ANALYSIS �
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THIRD READING
Bill No: AB 637
Author: Atkins (D), et al.
Amended: 4/24/13 in Assembly
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-1, 6/18/13
AYES: DeSaulnier, Gaines, Beall, Galgiani, Hueso, Lara, Liu,
Pavley, Roth
NOES: Wyland
NO VOTE RECORDED: Cannella
ASSEMBLY FLOOR : 54-22, 5/9/13 - See last page for vote
S UBJECT : Residential Development Loan Program
SOURCE : Author
DIGEST : This bill allows the California Housing Finance
Agency (CalHFA) to make Residential Development Loan Program
loans available for the development of rental housing in
addition to ownership housing.
ANALYSIS : Established in 1975, CalHFA is the state's
affordable housing bank. Generally, CalHFA issues tax-exempt
revenue bonds and uses the proceeds to make below market-rate
loans to income-eligible first-time homebuyers and the
developers of affordable rental housing. CalHFA's revenue bonds
obligate only CalHFA itself, not the State of California.
At times, the Legislature has required CalHFA to administer
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AB 637
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portions of general obligation housing bonds. In 2002,
California voters approved Proposition 46 which provided $2.1
billion in general obligation bonds for various affordable
housing programs, including $130 million for CalHFA's California
Homebuyer's Downpayment Assistance Program (CHDAP). In 2006,
the voters approved Proposition 1C, which authorized an
additional $2.85 billion in general obligation bonds for
numerous affordable housing programs, including an additional
$200 million for CHDAP.
CHDAP offers to income-qualified first-time homebuyers a
deferred-payment subordinate loan (also known as a "silent
second mortgage") in the amount of 3% of the purchase price or
appraised value, whichever is less, for the buyer to apply
towards a downpayment or closing costs. Payments on this loan
are deferred, meaning that the homebuyer does not have to make a
payment on this second mortgage until the home is sold,
refinanced, or paid in full.
AB 1512 (Garcia, Chapter 338, Statutes of 2005) allowed CalHFA,
at its discretion, to use not more than $75 million of
Proposition 46 CHDAP funds to finance the acquisition of land
and the construction and development of for-sale residential
structures through short-term loans, while requiring the
downpayment assistance remain the priority use for these funds.
Proposition 1C allowed CalHFA to use up to $100 million of the
CHDAP allocation for this same purpose. The idea was to put
CHDAP funds to short-term use until they were needed for
downpayment assistance. CalHFA marketed this program as the
Residential Development Loan Program (RDLP) and offered loans of
up to $5 million to local government agencies to assist with
site acquisition, predevelopment, and construction costs
associated with the development of affordable single family
housing projects.
As of March 31, 2013, the RDLP program had $21 million available
plus $25 million in outstanding loans currently due in the next
three years. CalHFA does not intend to transfer any additional
funds from CHDAP to the RDLP program. CalHFA has approximately
$117 million available for new CHDAP loans. In addition, the
proceeds of outstanding loans that are repaid will become
available. At this time, CHDAP is making roughly $36 million in
CHDAP loans per year, though this rate may rise as home prices
rise and the number of home sales increase.
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This bill allows CalHFA to make RDLP loans available for the
development of rental housing in addition to ownership housing.
Comments
Purpose of the bill . According to the author's office, the loss
of redevelopment and diminished voter-approved housing bond
funds has significantly reduced funding available for the
development of multifamily housing affordable to low-income
families. In many cases, redevelopment funding was used to
assist in purchasing land for affordable housing development or
for other pre-development costs associated with putting a
project together. This bill authorizes CalHFA to issue
pre-development loans for multifamily residential developments
in addition to for-sale residential structures. In doing so,
this bill will help fulfill the role that redevelopment agencies
used to play in helping get affordable rental housing projects
off the ground.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/19/13)
Corporation for Supportive Housing
San Diego Housing Federation
ASSEMBLY FLOOR : 54-22, 5/9/13
AYES: Alejo, Allen, Ammiano, Atkins, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gordon,
Gray, Hall, Roger Hern�ndez, Jones-Sawyer, Levine, Lowenthal,
Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Torres, Weber, Wieckowski, Williams, Yamada, John
A. P�rez
NOES: Achadjian, Bigelow, Ch�vez, Conway, Dahle, Donnelly, Beth
Gaines, Gorell, Grove, Hagman, Harkey, Jones, Linder,
Maienschein, Mansoor, Melendez, Morrell, Nestande, Olsen,
Patterson, Wagner, Wilk
NO VOTE RECORDED: Holden, Logue, Waldron, Vacancy
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JA:k 6/19/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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