BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 304
                                                                  Page  1

          Date of Hearing:   April 30, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                    AB 304 (Mullin) - As Amended:  April 22, 2003 

          Policy Committee:                              HousingVote:6-3

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill limits, to six percent of the home sales price, the  
          amount of downpayment assistance that the California Housing  
          Finance Agency (CalHFA) may provide using a $12.5 million  
          allocation of general obligation bonds from the 2002 housing  
          bond.  This allocation is reserved to assist low-income  
          first-time homebuyers who have received homeownership counseling  
          and are purchasing a home in a community revitalization area.

           FISCAL EFFECT  

          Negligible state fiscal impact.

           COMMENTS 

           Background and Purpose  .  The California Homebuyer's Downpayment  
          Assistance Program (CHDAP), administered by CalHFA, provides  
          downpayment assistance to first-time low- and moderate- income  
          homebuyers.  This program, established in 2000, offers a  
          deferred-payment loan of up to three percent of the purchase  
          price.  The $2.1 billion general obligation bond for housing  
          that was approved by the voters in November 2002 included $117.5  
          million for CHDAP.  As introduced, AB 304 would have increased  
          the allowable downpayment assistance under the program from  
          three to six percent.  

          In recognition that this increase in assistance could reduce the  
          number of applicants served under the program by up to one-half,  
          the bill was amended in policy committee to apply only to  
          CalHFA's Homeownership in Revitalization Areas Program (HIRAP).

          HIRAP was created by CalHFA to implement a separate $12.5  








                                                                  AB 304
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          million allocation from the housing bond.   These funds were  
          earmarked for downpayment assistance to low-income first-time  
          homebuyers who, as documented to CalHFA by a nonprofit  
          organization, are purchasing homes in community revitalization  
          areas targeted by the nonprofit and have received homeownership  
          counseling from the nonprofit organization.  There are no other  
          statutory requirements for HIRAP, and CalHFA has implemented it  
          using the same three percent limit as in CHDAP.  AB 304 would  
          establish a higher, six percent statutory limit for the $12.5  
          million bond allocation for HIRAP.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081