Amended in Assembly May 4, 2016

Amended in Assembly April 21, 2016

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 Section 51504 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 the California Homebuyer’s Downpayment Assistance 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.

This bill would appropriatebegin delete an unspecified amountend deletebegin insert $10,000,000end insert from the General Fund to the California Homebuyer’s Downpayment Assistance Program for the purposes of the downpayment assistance program described above. The bill would condition the application of these funds on an additional requirement that the home for which assistance is provided be in a development project that is in a designated infill site, close to public transit, and that is 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 Financebegin delete Agency,end deletebegin insert Agencyend insert 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 Assistancebegin delete Program,end deletebegin insert Programend insert 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:

P2    1

SECTION 1.  

Section 51504 of the Health and Safety Code is
2amended to read:

3

51504.  

(a) The agency shall administer a downpayment
4assistance program that includes, but is not limited to, all of the
5following:

6(1) Downpayment assistance shall include, but not be limited
7to, a deferred-payment, low-interest, junior mortgage loan to reduce
8the principal and interest payments and make financing affordable
9to first-time low- and moderate-income home buyers.

10(2) (A) Except as provided in subparagraph (B) or (C), the
11amount of downpayment assistance shall not exceed 3 percent of
12the home sale price.

13(B) The amount of downpayment assistance for a new home
14within an infill opportunity zone, as defined in Section 65088.1
15of the Government Code, a transit village development district, as
P3    1defined in Section 65460.4 of the Government Code, or a
2transit-oriented development specific plan area, as defined in
3paragraph (6), shall not exceed 5 percent of the purchase price or
4the appraised value, whichever amount is less, of the new home.
5The borrower of the downpayment assistance shall provide the
6lender originating the loan with a certification from the local
7government agency administering the infill opportunity zone, the
8transit village development district, or the transit-oriented
9development specific plan area that states that the property involved
10in the loan transaction is within the boundaries of either the infill
11opportunity zone, the transit village development district, or the
12transit-oriented development specific plan area.

13(C) Notwithstanding paragraph (1), the agency may, but is not
14required to, provide downpayment assistance that does not exceed
156 percent of the home sale price to first-time low-income home
16buyers who, as documented to the agency by a nonprofit
17organization that is certified and funded to provide home ownership
18counseling by a federally funded national nonprofit corporation,
19are purchasing a residence in a community revitalization area
20targeted by the nonprofit organization as a neighborhood in need
21of economic stimulation, renovation, and rehabilitation through
22efforts that include increased home ownership opportunities for
23low-income families. The agency shall not use more than six
24million dollars ($6,000,000) in funds made available pursuant to
25Section 53533 for the purposes of this paragraph.

26(3) The amount of the downpayment assistance shall be secured
27by a deed of trust in a junior position to the primary financing
28provided. The term of the loan for the downpayment assistance
29shall not exceed the term of the primary loan.

30(4) (A) Except as provided in subparagraphs (B) and (C), the
31amount of the downpayment assistance shall be due and payable
32at the end of the term or upon sale of or refinancing of the home.
33The borrower may refinance the mortgages on the home provided
34that the principal and accrued interest on the junior mortgage loan
35securing the downpayment assistance are repaid in full. All
36repayments shall be made to the agency to be reallocated for the
37purposes of this chapter.

38(B) The agency may, in its discretion, permit the downpayment
39assistance loan to be subordinated to refinancing if it determines
40that the borrower has demonstrated hardship, subordination is
P4    1required to avoid foreclosure, and the new loan meets the agency’s
2underwriting requirements. The agency may permit subordination
3on those terms and conditions as it determines are reasonable.

4(C) The amount of the downpayment assistance shall not be
5due and payable upon sale of the home if the first mortgage loan
6is insured by the Federal Housing Administration (FHA) or if the
7first mortgage loan is, or has been, transferred to the FHA, or if
8the requirement is otherwise contrary to regulations of the United
9States Department of Housing and Urban Development governing
10FHA insured first mortgage loans.

11(5) The agency may use up to 5 percent of the funds appropriated
12by the Legislature for purposes of this chapter to administer this
13program.

14(6) For purposes of this section, “transit-oriented development
15specific plan area” means a specific plan that meets the criteria set
16forth in Section 65451 of the Government Code, is centered around
17a rail or light-rail station, ferry terminal, bus hub, or bus transfer
18 station, and is intended to achieve a higher density use of land that
19facilitates use of the transit station.

20(b) In addition to the downpayment assistance program
21authorized by subdivision (a), the agency may, at its discretion,
22use not more than seventy-five million dollars ($75,000,000) of
23the funds available pursuant to this chapter to finance the
24acquisition of land and the construction and development of
25housing developments, as defined in Section 50073.5, and for-sale
26residential structures through short-term loans pursuant to its
27authority pursuant to Section 51100. However, the agency shall
28make downpayment assistance provided pursuant to paragraph
29(1), subparagraphs (A) and (B) of paragraph (2), and paragraphs
30(3) to (5), inclusive, of subdivision (a) the priority use for these
31funds. A loan made pursuant to this section is not subject to Article
324 (commencing with Section 51175) of Chapter 5.

33(c) (1) In addition to the downpayment assistance program
34authorized by subdivision (a), the agency shall provide
35downpayment assistance from the funds appropriated by the act
36adding this subdivision to first-time home buyers pursuant to
37paragraphs (1), (2), (3), (4), and (6) of subdivision (a) for homes
38in development projects that are located in designated infill sites,
39close to public transit, and that are located in cities, counties, or
40cities and counties that reduce developer or impact fees or reduce
P5    1or remove regulatory barriers to housing construction for the
2development projects. The agency shall identify and shall
3objectively measure the types of local agency actions or incentives
4that the agency determines appropriately reduce developer or
5impact fees or reduce or remove regulatory barriers to affordable
6housing projects. These actions or incentives may include, but are
7not limited to, modifications to any or all of the following:

8(A) Local design review requirements.

9(B) Land use controls.

10(C) Building codes and enforcement.

11(D) Onsite or offsite improvement requirements.

12(E) Project design.

13(F) Permit processing.

14(G) (i) A 30-percent reduction in the schedule of local fees,
15 charges, and other exactions on local developers within the local
16agency’s jurisdiction within 12 months or more prior to the
17submission of the application for assistance pursuant to this
18subdivision. The local agency shall provide verification of the
19reduction with supporting documents showing successive annual
20fee schedules to the agency.

21(ii) For the purposes of this subparagraph, “local fees, charges,
22and other exactions” includes, but is not limited to, all of the
23following:

24(I) Planning and zoning fees.

25(II) Environmental documentation fees.

26(III) Building permit fees.

27(IV) Plan check fees.

28(V) School fees.

29(VI) School mitigation fees.

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

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

32(IX) Utility or water connection fees.

33(X) Public safety fees.

34(XI) Capital facilities fees.

35(XII) Parks and recreation fees.

36(XIII) Any other fee that may substitute for the requirements
37described in subparagraph (D).

38(2) Paragraph (1) applies only to the use of funds appropriated
39by the act adding this subdivision and shall not be construed to
40apply to the use of any other funds.

P6    1

SEC. 2.  

If the Commission on State Mandates determines that
2this act contains costs mandated by the state, reimbursement to
3local agencies and school districts for those costs shall be made
4pursuant to Part 7 (commencing with Section 17500) of Division
54 of Title 2 of the Government Code.

6

SEC. 3.  

The sum ofbegin delete ____ dollars ($____)end deletebegin insert ten million dollars
7($10,000,000)end insert
is hereby appropriated from the General Fund to
8the California Homebuyer’s Downpayment Assistance Program
9for the purposes set forth in Section 51504 of the Health and Safety
10Code that satisfy the requirements of subdivision (c) of that section.
11After 48 months of availability, if the California Housing Finance
12Agency determines that these moneys will not be utilized for the
13purposes set forth in Section 51504 of the Health and Safety Code
14that satisfy the requirements of subdivision (c) of that section, the
15moneys shall be available for the general use of the California
16Housing Finance Agency for the purposes of the California
17Homebuyer’s Downpayment Assistance Program.



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