BILL ANALYSIS Ó
AB 2280
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Date of Hearing: May 25, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2280 (Ridley-Thomas) - As Amended April 21, 2016
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|Policy |Housing and Community |Vote:|6 - 1 |
|Committee: |Development | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the California Housing Finance Agency
(CalHFA), within five business days of making a change to the
eligibility requirements for a housing or lending program that
the agency administers, to provide participating parties notice
of the change unless providing that notice within five business
days would impose an undue burden on the agency. The bill
authorizes the notice to be provided by a program bulletin. The
affected programs include, but are not limited to, the
California Homebuyer's Downpayment Assistance Program (CHDAP)
and the Mortgage Credit Certificate Program.
FISCAL EFFECT:
AB 2280
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No state cost. CalHFA indicates that any expenses they incur
will be covered within the 5% administrative allowance granted
under the affected programs. Staff notes that CalHFA operates
independently of the state General Fund and derives the funding
for its downpayment assistance program from the sale of bonds.
COMMENTS:
1)Purpose. According to the author, this "bill is needed to
provide certainty to potential homeowners who participate in
programs like CHDAP. The bill serves these individuals by
increasing their confidence in these complex programs because
they can determine acquisitions costs without the fear of
eligibility requirements being changed without their
knowledge. If changes in a program are made after a
prospective home buyer has entered into a contract to purchase
a home, the bill helps those individuals secure other means of
financing as soon as possible."
2)Background. Established in 1975, CalHFA was chartered as the
state's affordable housing bank to make below market-rate
loans for single-family and multi-family housing through the
sale of tax-exempt bonds. Due to variable market
considerations and bondholder requirements CalHFA is required
to modify aspects of CHDAP and other housing programs, such as
income eligibility criteria, in some cases with little
warning. When time allows, CalHFA currently uses program
bulletins to notify participating lenders in advance of
upcoming program changes. The agency also posts the
information on its website. The agency is in the process of
creating a written policy regarding program change
notifications for stakeholders. It should be noted, however,
that CalHFA does not work directly with prospective
homebuyers, but rather with lending institutions. Therefore,
lending institutions are the primary audience for program
change notifications.
AB 2280
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Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081