Amended in Assembly April 13, 2016

Amended in Assembly April 6, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1969


Introduced by Assembly Member Steinorth

February 16, 2016


An act to amend Sectionbegin delete 51451.5end deletebegin insert 51504end insert of the Health and Safety Code, relating to housing, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1969, as amended, Steinorth. Affordable housing: home purchase assistance.

Existing law establishes thebegin delete Homebuyer Down Paymentend deletebegin insert California Homebuyer’s Downpaymentend insert Assistancebegin delete Program of 2002 to provide assistance in the amount of the applicable school facility fee on affordable housing developments. Existing law requires the program to provide purchasers of newly constructed residential structures in development projects with assistance if the development project is located in an economically distressed area and other specified requirements are met, or if the purchaser is a qualified first-time home buyer and other specified requirements are met. Under existing law, the program is funded by bonds sold pursuant to the Housing and Emergency Shelter Trust Fund Act of 2002, which was approved by the voters at the November 5, 2002, statewide general election.end deletebegin insert Program, which requires the California Housing Finance Agency to, among other things, administer a program that provides downpayment assistance, including deferred-payment, low-interest, junior mortgage loans to reduce principal and interest payments, that makes financing affordable to first-time low- and moderate-income home buyers, pursuant to specified terms.end insert

This bill would appropriate an unspecified amount from the General Fund to the California Homebuyer’s Downpayment Assistancebegin delete Program of 2002.end deletebegin insert Program for the purposes of the downpayment assistance program described above.end insert The bill would condition the application of these fundsbegin delete to the assistance to purchasers of residential structures in development projects located in economically distressed areas, as described above,end delete on an additional requirement that thebegin insert home for which assistance is provided be in aend insert development projectbegin delete beend delete located in a city, county, or city and county that reduces developer or impact fees or reduces or removes regulatory barriers to housing construction for the development project, as specified. As part of this additional requirement, the bill would require a local agency to provide verification of the local agency’s schedule of local fees, charges, and other exactions to the California Housing Finance Agency, and would thereby impose a state-mandated local program. The bill would make these moneys available for the general use of the California Housing Finance Agency for the purposes of the California Homebuyer’s Downpayment Assistance Program, if specified requirements are met.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete
P2    1

SECTION 1.  

Section 51451.5 of the Health and Safety Code,
2as amended by Section 1 of Chapter 553 of the Statutes of 2003,
3is amended to read:

4

51451.5.  

The Homebuyer Down Payment Assistance Program
5of 2002 is hereby established, to provide assistance in the amount
6of the applicable school facility fee on affordable housing
7developments. The Homebuyer Down Payment Assistance Program
P3    1of 2002 shall, with funds provided by the Housing and Emergency
2Shelter Trust Fund Act of 2002 (Part 11 (commencing with Section
353500)), provide the following assistance:

4(a)  Downpayment assistance to the purchaser of any newly
5constructed residential structure in a development project in an
6economically distressed area in the amount of school facility fees
7paid pursuant to Section 65995.5 or 65995.7 of the Government
8Code, less the amount that would be required pursuant to
9subdivision (b) of Section 65995 of the Government Code,
10notwithstanding Sections 65995.5 and 65995.7 of the Government
11Code, if all of the following conditions are met:

12(1)  The development project is located in a county with an
13unemployment rate that equals or exceeds 125 percent of the state
14unemployment rate.

15(2)  Five hundred or more residential structures have been
16constructed in the county during 2001.

17(3)  A building permit for an eligible residential structure in the
18development project is issued by the local agency on or after
19January 1, 2002.

20(4)  The eligible residential structure is to be owner occupied
21for at least five years. If a structure is owner occupied for fewer
22than five years, the recipient of the assistance shall repay the School
23Facilities Fee Assistance Fund the amount of the assistance, on a
24prorated basis.

25(5)  The sales price of the eligible residential structure does not
26exceed 175 percent of the median sales price of residential
27structures in the county during the average of the previous five
28years. However, if the five-year average exceeds the
29Governmental-Sponsored Enterprises conforming loan limit, the
30sales price in that county shall not exceed 100 percent of the
31median sales price of residential structures in the county during
32the average of the previous five years.

33(b)  Downpayment assistance to the purchaser of any newly
34constructed residential structure in a development project in the
35aggregate amount of school facility fees paid pursuant to one, all,
36or any combination of subdivision (b) of Section 65995, Section
3765995.5, or Section 65995.7 of the Government Code for the
38eligible residential structure if all of the following conditions are
39met:

P4    1(1)  The assistance is provided to a qualified first-time
2homebuyer pursuant to Section 50068.5.

3(2)  The qualified first-time homebuyer does not exceed the
4lower or moderate-income requirements in Section 50093.

5(3)  A building permit for an eligible residential structure in the
6development project is issued by the local agency on or after
7January 1, 2002.

8(4)  The eligible residential structure is to be owner occupied
9for at least five years. If a structure is owner occupied for fewer
10than five years, the recipient of the assistance shall repay the School
11Facilities Fee Assistance Fund the amount of the assistance, on a
12prorated basis.

13(c) Downpayment assistance from funds appropriated by the
14act adding this subdivision to provide assistance in the amount of
15the applicable school facility fee on affordable housing shall be
16available to the purchaser of any newly constructed residential
17structure in a development project in an economically distressed
18area if the following requirements are met:

19(1) The downpayment assistance is in the amount of school
20facility fees paid pursuant to Section 65995.5 or 65995.7 of the
21Government Code, less the amount that would be required pursuant
22to subdivision (b) of Section 65995 of the Government Code,
23notwithstanding Sections 65995.5 and 65995.7 of the Government
24Code.

25(2) The downpayment assistance is for a residential structure
26that satisfies the conditions described in paragraphs (1) to (5),
27inclusive, of subdivision (a).

28(3) The development project is located in a city, county, or city
29and county that reduces developer or impact fees or reduces or
30removes regulatory barriers to housing construction for the
31development project. The agency shall identify and shall
32objectively measure the types of local agency actions or incentives
33that the agency determines appropriately reduce developer or
34impact fees or reduce or remove regulatory barriers to housing
35construction. These actions or incentives may include, but are not
36limited to, modifications to any or all of the following:

37(A) Local design review requirements.

38(B) Land use controls.

39(C) Building codes and enforcement.

40(D) Onsite or offsite improvement requirements.

P5    1(E) Project design.

2(F) Permit processing.

3(G) (i) A 30 percent reduction in the schedule of local fees,
4charges, and other exactions on local developers within the local
5agency’s jurisdiction within 12 months or more prior to the
6submission of the application for assistance pursuant to this
7subdivision. The local agency shall provide verification of the
8reduction with supporting documents showing successive annual
9fee schedules to the agency.

10(ii) For the purposes of this subparagraph, “local fees, charges,
11and other exactions” includes, but is not limited to, all of the
12following:

13(I) Planning and zoning fees.

14(II) Environmental documentation fees.

15(III) Building permit fees.

16(IV) Plan check fees.

17(V) School fees.

18(VI) School mitigation fees.

19(VII) Highway, road, traffic, and transit fees.

20(VIII) Water, wastewater, sewer, and drainage fees.

21(IX) Utility or water connection fees.

22(X) Public safety fees.

23(XI) Capital facilities fees.

24(XII) Affordable housing fees and assessments.

25(XIII) Parks and recreation fees.

26(XIV) Any other fee that may substitute for the requirements
27described in subparagraph (D).

28

SEC. 2.  

Section 51451.5 of the Health and Safety Code, as
29amended by Section 2 of Chapter 553 of the Statutes of 2003, is
30amended to read:

31

51451.5.  

The Homebuyer Down Payment Assistance Program
32of 2002 is hereby established, to provide assistance in the amount
33of the applicable school facility fee on affordable housing. The
34Homebuyer Down Payment Assistance Program of 2002 shall,
35with funds provided by the Kindergarten-University Public
36Education Facilities Bond Acts of 2002 and 2004 (Part 68.1
37(commencing with Section 100600) of the Education Code, and
38Part 68.2 (commencing with Section 100800) of the Education
39Code), provide the following assistance:

P6    1(a)  Downpayment assistance to the purchaser of any newly
2constructed residential structure in a development project in an
3economically distressed area in the amount of school facility fees
4paid pursuant to Section 65995.5 or 65995.7 of the Government
5Code, less the amount that would be required pursuant to
6subdivision (b) of Section 65995 of the Government Code,
7notwithstanding Sections 65995.5 and 65995.7 of the Government
8Code, if all of the following conditions are met:

9(1)  The development project is located in a county with an
10unemployment rate that equals or exceeds 125 percent of the state
11unemployment rate.

12(2)  Five hundred or more residential structures have been
13constructed in the county during 2001.

14(3)  A building permit for an eligible residential structure in the
15project is issued by the local agency on or after January 1, 2002.

16(4)  The eligible residential structure is to be owner occupied
17for at least five years. If a structure is owner occupied for fewer
18than five years, the recipient of the assistance shall repay the School
19Facilities Fee Assistance Fund the amount of the assistance, on a
20prorated basis.

21(5)  The sales price of the eligible residential structure does not
22exceed 175 percent of the median sales price of residential
23structures in the county during the average of the previous five
24years. However, if the five-year average exceeds the
25Governmental-Sponsored Enterprises conforming loan limit, the
26sales price in that county shall not exceed 100 percent of the
27median sales price of residential structures in the county during
28the average of the previous five years.

29(b)  Downpayment assistance to the purchaser of any newly
30constructed residential structure in a development project in the
31aggregate amount of school facility fees paid pursuant to one, all,
32or any combination of subdivision (b) of Section 65995, Section
3365995.5, or Section 65995.7 of the Government Code for the
34eligible residential structure if all of the following conditions are
35met:

36(1)  The assistance is provided to a qualified first-time home
37buyer pursuant to Section 50068.5.

38(2)  The qualified first-time home buyer does not exceed the
39lower or moderate-income requirements in Section 50093.

P7    1(3)  A building permit for an eligible residential structure in the
2project is issued by the local agency on or after January 1, 2002.

3(4)  The eligible residential structure is to be owner occupied
4for at least five years. If a structure is owner occupied for fewer
5than five years, the recipient of the assistance shall repay the School
6Facilities Fee Assistance Fund the amount of the assistance, on a
7prorated basis.

8(c) Downpayment assistance from funds appropriated by the
9act adding this subdivision to provide assistance in the amount of
10the applicable school facility fee on affordable housing shall be
11available to the purchaser of any newly constructed residential
12structure in a development project in an economically distressed
13 area if the following requirements are met:

14(1) The downpayment assistance is in the amount of school
15facility fees paid pursuant to Section 65995.5 or 65995.7 of the
16Government Code, less the amount that would be required pursuant
17to subdivision (b) of Section 65995 of the Government Code,
18notwithstanding Sections 65995.5 and 65995.7 of the Government
19Code.

20(2) The downpayment assistance is for a residential structure
21that satisfies the conditions described in paragraphs (1) to (5),
22inclusive, of subdivision (a).

23(3) The development project is located in a city, county, or city
24and county that reduces developer or impact fees or reduces or
25removes regulatory barriers to housing construction for the
26development project. The agency shall identify and shall
27objectively measure the types of local agency actions or incentives
28that the agency determines appropriately reduce developer or
29impact fees or reduce or remove regulatory barriers to housing
30construction. These actions or incentives may include, but are not
31limited to, modifications to any or all of the following:

32(A) Local design review requirements.

33(B) Land use controls.

34(C) Building codes and enforcement.

35(D) Onsite or offsite improvement requirements.

36(E) Project design.

37(F) Permit processing.

38(G) (i) A 30 percent reduction in the schedule of local fees,
39charges, and other exactions on local developers within the local
40agency’s jurisdiction within 12 months or more prior to the
P8    1submission of the application for assistance pursuant to this
2subdivision. The local agency shall provide verification of the
3reduction with supporting documents showing successive annual
4fee schedules to the agency.

5(ii) For the purposes of this subparagraph, “local fees, charges,
6and other exactions” includes, but is not limited to, all of the
7following:

8(I) Planning and zoning fees.

9(II) Environmental documentation fees.

10(III) Building permit fees.

11(IV) Plan check fees.

12(V) School fees.

13(VI) School mitigation fees.

14(VII) Highway, road, traffic, and transit fees.

15(VIII) Water, wastewater, sewer, and drainage fees.

16(IX) Utility or water connection fees.

17(X) Public safety fees.

18(XI) Capital facilities fees.

19(XII) Affordable housing fees and assessments.

20(XIII) Parks and recreation fees.

21(XIV) Any other fee that may substitute for the requirements
22described in subparagraph (D).

end delete
23begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 51504 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
24amended to read:end insert

25

51504.  

(a) The agency shall administer a downpayment
26assistance program that includes, but is not limited to, all of the
27following:

28(1) Downpayment assistance shall include, but not be limited
29to, a deferred-payment, low-interest, junior mortgage loan to reduce
30the principal and interest payments and make financing affordable
31to first-time low- and moderate-income home buyers.

32(2) (A) Except as provided in subparagraph (B) or (C), the
33amount of downpayment assistance shall not exceed 3 percent of
34the home sale price.

35(B) The amount of downpayment assistance for a new home
36within an infill opportunity zone, as defined in Section 65088.1
37of the Government Code, a transit village development district, as
38defined in Section 65460.4 of the Government Code, or a
39transit-oriented development specific plan area, as defined in
40paragraph (6), shall not exceed 5 percent of the purchase price or
P9    1the appraised value, whichever amount is less, of the new home.
2The borrower of the downpayment assistance shall provide the
3lender originating the loan with a certification from the local
4government agency administering the infill opportunity zone, the
5transit village development district, or the transit-oriented
6development specific plan area that states that the property involved
7in the loan transaction is within the boundaries of either the infill
8opportunity zone, the transit village development district, or the
9transit-oriented development specific plan area.

10(C) Notwithstanding paragraph (1), the agency may, but is not
11required to, provide downpayment assistance that does not exceed
126 percent of the home sale price to first-time low-income home
13buyers who, as documented to the agency by a nonprofit
14organization that is certified and funded to provide home ownership
15counseling by a federally funded national nonprofit corporation,
16are purchasing a residence in a community revitalization area
17targeted by the nonprofit organization as a neighborhood in need
18of economic stimulation, renovation, and rehabilitation through
19efforts that include increased home ownership opportunities for
20low-income families. The agency shall not use more than six
21million dollars ($6,000,000) in funds made available pursuant to
22Section 53533 for the purposes of this paragraph.

23(3) The amount of the downpayment assistance shall be secured
24by a deed of trust in a junior position to the primary financing
25provided. The term of the loan for the downpayment assistance
26shall not exceed the term of the primary loan.

27(4) (A) Except as provided in subparagraphs (B) and (C), the
28amount of the downpayment assistance shall be due and payable
29at the end of the term or upon sale of or refinancing of the home.
30The borrower may refinance the mortgages on the home provided
31that the principal and accrued interest on the junior mortgage loan
32securing the downpayment assistance are repaid in full. All
33repayments shall be made to the agency to be reallocated for the
34purposes of this chapter.

35(B) The agency may, in its discretion, permit the downpayment
36assistance loan to be subordinated to refinancing if it determines
37that the borrower has demonstrated hardship, subordination is
38required to avoid foreclosure, and the new loan meets the agency’s
39underwriting requirements. The agency may permit subordination
40on those terms and conditions as it determines are reasonable.

P10   1(C) The amount of the downpayment assistance shall not be
2due and payable upon sale of the home if the first mortgage loan
3is insured by the Federal Housing Administration (FHA) or if the
4first mortgage loan is, or has been, transferred to the FHA, or if
5the requirement is otherwise contrary to regulations of the United
6States Department of Housing and Urban Development governing
7FHA insured first mortgage loans.

8(5) The agency may use up to 5 percent of the funds appropriated
9by the Legislature for purposes of this chapter to administer this
10program.

11(6) For purposes of this section, “transit-oriented development
12specific plan area” means a specific plan that meets the criteria set
13forth in Section 65451 of the Government Code, is centered around
14a rail or light-rail station, ferry terminal, bus hub, or bus transfer
15 station, and is intended to achieve a higher density use of land that
16facilitates use of the transit station.

17(b) In addition to the downpayment assistance program
18authorized by subdivision (a), the agency may, at its discretion,
19use not more than seventy-five million dollars ($75,000,000) of
20the funds available pursuant to this chapter to finance the
21acquisition of land and the construction and development of
22housing developments, as defined in Section 50073.5, and for-sale
23residential structures through short-term loans pursuant to its
24authority pursuant to Section 51100. However, the agency shall
25make downpayment assistance provided pursuant to paragraph
26(1), subparagraphs (A) and (B) of paragraph (2), and paragraphs
27(3) to (5), inclusive, of subdivision (a) the priority use for these
28funds. A loan made pursuant to this section is not subject to Article
294 (commencing with Section 51175) of Chapter 5.

begin insert

30
(c) (1) In addition to the downpayment assistance program
31authorized by subdivision (a), the agency shall provide
32downpayment assistance from the funds appropriated by the act
33adding this subdivision to first-time home buyers pursuant to
34paragraphs (1), (2), (3), (4), and (6) of subdivision (a) for homes
35in development projects that are located in cities, counties, or
36cities and counties that reduce developer or impact fees or reduce
37or remove regulatory barriers to housing construction for the
38development projects. The agency shall identify and shall
39objectively measure the types of local agency actions or incentives
40that the agency determines appropriately reduce developer or
P11   1impact fees or reduce or remove regulatory barriers to housing
2construction. These actions or incentives may include, but are not
3limited to, modifications to any or all of the following:

end insert
begin insert

4
(A) Local design review requirements.

end insert
begin insert

5
(B) Land use controls.

end insert
begin insert

6
(C) Building codes and enforcement.

end insert
begin insert

7
(D) Onsite or offsite improvement requirements.

end insert
begin insert

8
(E) Project design.

end insert
begin insert

9
(F) Permit processing.

end insert
begin insert

10
(G) (i) A 30-percent reduction in the schedule of local fees,
11charges, and other exactions on local developers within the local
12agency’s jurisdiction within 12 months or more prior to the
13submission of the application for assistance pursuant to this
14subdivision. The local agency shall provide verification of the
15reduction with supporting documents showing successive annual
16fee schedules to the agency.

end insert
begin insert

17
(ii) For the purposes of this subparagraph, “local fees, charges,
18and other exactions” includes, but is not limited to, all of the
19following:

end insert
begin insert

20
(I) Planning and zoning fees.

end insert
begin insert

21
(II) Environmental documentation fees.

end insert
begin insert

22
(III) Building permit fees.

end insert
begin insert

23
(IV) Plan check fees.

end insert
begin insert

24
(V) School fees.

end insert
begin insert

25
(VI) School mitigation fees.

end insert
begin insert

26
(VII) Highway, road, traffic, and transit fees.

end insert
begin insert

27
(VIII) Water, wastewater, sewer, and drainage fees.

end insert
begin insert

28
(IX) Utility or water connection fees.

end insert
begin insert

29
(X) Public safety fees.

end insert
begin insert

30
(XI) Capital facilities fees.

end insert
begin insert

31
(XII) Affordable housing fees and assessments.

end insert
begin insert

32
(XIII) Parks and recreation fees.

end insert
begin insert

33
(XIV) Any other fee that may substitute for the requirements
34described in subparagraph (D).

end insert
begin insert

35
(2) Paragraph (1) applies only to the use of funds appropriated
36by the act adding this subdivision and shall not be construed to
37apply to the use of any other funds.

end insert
38

begin deleteSEC. 3.end delete
39
begin insertSEC. 2.end insert  

If the Commission on State Mandates determines that
40this act contains costs mandated by the state, reimbursement to
P12   1local agencies and school districts for those costs shall be made
2pursuant to Part 7 (commencing with Section 17500) of Division
34 of Title 2 of the Government Code.

4

begin deleteSEC. 4.end delete
5
begin insertSEC. 3.end insert  

The sum of ____ dollars ($____) is hereby appropriated
6from the General Fund to the California Homebuyer’s
7Downpayment Assistance Program for the purposes set forth in
8Sectionbegin delete 51451.5end deletebegin insert 51504end insert of the Health and Safety Code that satisfy
9the requirements of subdivision (c) of that section. After 48 months
10of availability, if the California Housing Finance Agency
11 determines that these moneys will not be utilized for the purposes
12set forth in Sectionbegin delete 51451.5end deletebegin insert 51504end insert of the Health and Safety Code
13that satisfy the requirements of subdivision (c) of that section, the
14moneys shall be available for the general use of the California
15Housing Finance Agency for the purposes of the California
16Homebuyer’s Downpayment Assistance Program, but may also
17continue to be available for the purposes set forth in Sectionbegin delete 51505end delete
18begin insert 51504end insert of the Health and Safety Code.



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