BILL ANALYSIS Ó
AB 2280
Page 1
ASSEMBLY THIRD READING
AB
2280 (Ridley-Thomas)
As Amended April 21, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Housing |6-1 |Chiu, Steinorth, |Beth Gaines |
| | |Burke, Chau, Lopez, | |
| | |Mullin | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |18-2 |Gonzalez, Bloom, |Bigelow, Wagner |
| | |McCarty, Bonta, | |
| | |Calderon, Chang, | |
| | |Daly, Eggman, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Holden, Jones, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Weber, Wood | |
| | | | |
AB 2280
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| | | | |
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SUMMARY: Requires the California Housing Finance Agency
(CalHFA) to notify participating parties within five business
days of making a change to the eligibility requirements for a
housing or lending program that the agency administers, unless
it would impose an undue burden. Specifically, this bill:
1)Requires 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 a lender or
other party participating in the program notice of the change
unless providing that notice within five business days would
impose an undue burden on the agency.
2)Authorizes the notice to be provided by a program bulletin.
3)Affects programs including, but not limited to, the California
Homebuyer's Downpayment Assistance Program (CHDAP) and the
Mortgage Credit Certificate Program.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, no state cost. CalHFA indicates that any expenses
they incur will be covered within the 5% administrative
allowance granted under the affected programs. Appropriations
Committee 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:
AB 2280
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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. One of the larger programs that CalHFA
operates is the CHDAP, which provides homebuyers between 3% and
6% in downpayment assistance secured as a second mortgage on the
home. The program operates as a revolving loan and when a home
is sold CalHFA is repaid allowing the funds to go to another
homebuyer. There is approximately $150 million available in
CHDAP at this time. The program can provide downpayments to
individuals that make up to 120% of the area median income (AMI)
and just recently raised its income limits to 140% of AMI in
high cost areas.
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 Web site. 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.
Purpose of the bill: 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
AB 2280
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soon as possible."
Analysis Prepared by:
Rebecca Rabovsky / H. & C.D. / (916) 319-2085
FN:
0003065