BILL NUMBER: AB 2157 CHAPTERED 09/20/00 CHAPTER 553 FILED WITH SECRETARY OF STATE SEPTEMBER 20, 2000 APPROVED BY GOVERNOR SEPTEMBER 18, 2000 PASSED THE ASSEMBLY AUGUST 22, 2000 PASSED THE SENATE AUGUST 18, 2000 AMENDED IN SENATE JUNE 27, 2000 AMENDED IN ASSEMBLY MARCH 28, 2000 INTRODUCED BY Assembly Member Lowenthal FEBRUARY 23, 2000 An act to amend Sections 50083, 50086, 50960, and 51331 of, and to add Section 50076.6 to, the Health and Safety Code, relating to housing. LEGISLATIVE COUNSEL'S DIGEST AB 2157, Lowenthal. Housing: loans. Existing law authorizes the California Housing Finance Agency to issue revenue bonds and make construction and mortgage loans to meet the multifamily rental housing needs of persons and families of low or moderate income. For that purpose, "mortgage loan" is defined as a long-term loan secured by a mortgage made for permanent financing of a housing development or residential structure. This bill would expand that definition to any loan, as defined, that is made for financing to create or preserve the long-term affordability of a housing development or residential structure. The bill would make related changes. It would also require a loan document for a loan that is not secured by real property and is made to a natural person to state that the loan is a recourse obligation and made subject to or sold pursuant to a lien. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 50076.6 is added to the Health and Safety Code, to read: 50076.6. "Loan," for purposes of provisions relating to the agency, means an obligation to repay funds advanced by the agency for the purpose of financing housing that is evidenced by a promissory note or other instrument in writing and that may or may not be secured by real or personal property. SEC. 2. Section 50083 of the Health and Safety Code is amended to read: 50083. "Mortgage" means a mortgage, deed of trust, or other instrument that may be a lien on real property. "Mortgage" includes the note secured by such an instrument. SEC. 3. Section 50086 of the Health and Safety Code is amended to read: 50086. "Mortgage loan" means a loan that is secured by a mortgage and is made for financing, including refinancing of existing mortgage obligations as authorized by regulation of the agency, to create or preserve the long-term affordability of a housing development or a residential structure in the state, or a buy-down mortgage loan secured by a mortgage as authorized by regulation of the agency, of an owner-occupied unit in this state. SEC. 4. Section 50960 is added to the Health and Safety Code, to read: 50960. A loan document for a loan that is not secured by real property and is made to a person, not including a firm, association, partnership, organization, corporation, limited liability company, or other group, however formed, shall state that the loan is a recourse obligation and that the personal property of the borrower may be subject to or sold pursuant to a lien in order to pay the obligation. SEC. 5. Section 51331 of the Health and Safety Code is amended to read: 51331. Subject only to the limitations prescribed in this chapter, the agency, in addition to any other power conferred by this part with respect to multifamily rental housing and housing developments, may make or undertake commitments to make loans to housing sponsors to finance the acquisition, construction, rehabilitation, refinancing, or development of multifamily rental housing. For this purpose, the agency shall enter into regulatory contracts and other agreements with housing sponsors receiving loans pursuant to this chapter to ensure compliance with this chapter.