BILL NUMBER: AB 2865	CHAPTERED  07/05/00

	CHAPTER   81
	FILED WITH SECRETARY OF STATE   JULY 5, 2000
	APPROVED BY GOVERNOR   JULY 5, 2000
	PASSED THE ASSEMBLY   JUNE 22, 2000
	PASSED THE SENATE   JUNE 15, 2000
	AMENDED IN SENATE   JUNE 15, 2000
	AMENDED IN ASSEMBLY   MAY 25, 2000

INTRODUCED BY   Assembly Member Alquist
   (Coauthors:  Assembly Members Aroner, Cardoza, Cedillo, Ducheny,
Dutra, Gallegos, Hertzberg, Longville, Lowenthal, Reyes, Romero,
Shelley, Steinberg, Thomson, Torlakson, Villaraigosa, Vincent,
Wiggins, and Wildman)
   (Coauthors:  Senators Alarcon, Costa, Hughes, Perata, Sher, and
Soto)

                        MARCH 6, 2000

   An act to add Chapter 11 (commencing with Section 51500) to Part 3
of Division 31 of the Health and Safety Code, relating to housing,
and declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2865, Alquist.  Affordable housing:  financial assistance.
   Existing law requires the California Housing Finance Agency to
administer various housing programs to meet the needs of persons and
families of very low, low-, and moderate-income households.
   This bill would create the California Homebuyer's Downpayment
Assistance Program, would require the California Housing Finance
Agency to administer the program, and would require that the program
include specified conditions and be limited to first-time homebuyers.

   This bill would declare that it is to take effect immediately as
an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Chapter 11 (commencing with Section 51500) is added to
Part 3 of Division 31 of the Health and Safety Code, to read:

      CHAPTER 11.  CALIFORNIA HOMEBUYER'S DOWNPAYMENT ASSISTANCE
PROGRAM

   51500.  This chapter shall be known and may be cited as the
California Homebuyer's Downpayment Assistance Program.
   51501.  The Legislature finds and declares all of the following:
   (a) There is a continuing and urgent need to provide affordable
mortgage financing to meet the increasingly unfulfilled housing needs
of citizens of this state.
   (b) The high cost of housing impedes the ability of California
employers to compete in the national marketplace for employees.
   (c) Affordable housing enhances the quality of life for California
residents and provides fuel for the state's economic engine.
   (d) Housing is a critical component of the California economy,
both as an income producing sector and a principal factor in economic
development.
   (e) California's housing crisis severely impacts families
struggling to provide safe, stable homes for their children to grow
and learn and the workers who are the backbone of many of the state's
most important industries.
   (f) The percentage of Californians able to purchase their own
homes continues to decline, even as that percentage climbs for the
rest of the nation.
   (g) Therefore, this chapter is enacted to make existing financing
for residential mortgages more affordable to California's homebuyers.

   51502.  The purpose of the California Homebuyer's Downpayment
Assistance Program is to assist first-time low- and moderate-income
homebuyers utilizing existing mortgage financing.
   51504.  (a) The agency shall administer a downpayment assistance
program that includes, but is not limited to, all of the following:
   (b) Downpayment assistance shall include, but not be limited to, a
deferred-payment, low-interest, junior mortgage loan to reduce the
principal and interest payments and make financing affordable to
first-time low- and moderate-income homebuyers.
   (c) The amount of downpayment assistance shall not exceed 3
percent of the home sales price.
   (d) The amount of downpayment assistance shall be secured by a
deed of trust in a junior position to the primary financing provided.
  The term of the loan for the downpayment assistance shall not
exceed the term of the primary loan.
   (e) The amount of the downpayment assistance shall be due and
payable at the end of the term or upon sale of or refinancing of the
home.  The borrower may refinance the mortgages on the home provided
the principal and accrued interest on the junior mortgage loan
securing the downpayment assistance are repaid in full.  All
repayments shall be made to the agency to be reallocated for the
purposes of this chapter.
   (f) The agency may use up to 5 percent of the funds appropriated
by the Legislature for purposes of this chapter to administer this
program.
   51506.  The downpayment assistance provided by this program shall
be limited to first-time homebuyers.
   51510.  The agency shall have all the powers conferred upon it by
this part (commencing with Section 50900) in administering this
chapter.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to increase the availability of funds for downpayment
assistance in order to increase the utilization of existing mortgage
financing as soon as possible, it is necessary that this act take
effect immediately.