BILL ANALYSIS
AB 304
Page 1
ASSEMBLY THIRD READING
AB 304 (Mullin)
As Amended April 22, 2003
Majority vote
HOUSING 6-3 APPROPRIATIONS 17-7
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|Ayes:|Lowenthal, Dutra, Kehoe, |Ayes:|Steinberg, Berg, |
| |Mullin, Salinas, | |Calderon, Corbett, |
| |Steinberg | |Correa, Diaz, Firebaugh, |
| | | |Goldberg, Leno, Nation, |
| | | |Negrete McLeod, Nunez, |
| | | |Pavley, Ridley-Thomas, |
| | | |Simitian, Wiggins, Yee |
|-----+--------------------------+-----+--------------------------|
| | | | |
|Nays:|Mountjoy, Cogdill, Runner |Nays:|Bates, Daucher, Haynes, |
| | | |Maldonado, Pacheco, |
| | | |Runner, Samuelian |
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SUMMARY : Increases down payment assistance provided in the
Homeownership In Revitalization Areas Program (HIRAP) created by
Proposition 46 (Housing Bond) from three percent to six percent
of the home sales price.
FISCAL EFFECT : Unknown
COMMENTS : The California Homebuyer's Downpayment Assistance
Program (CHDAP) administered by CalHFA provides downpayment
assistance to first-time low- and moderate- income homebuyers.
This program offers a deferred-payment junior loan of an amount
up to three percent of the purchase price or appraised value.
Homebuyers are able to use these funds to help with their
downpayment and closing costs without the need to make monthly
payments on the loan. Interest will be calculated at three
percent simple interest. The assistance may be combined with any
CalHFA or non-CalHFA conventional or government first mortgage
loan.
As the California economic slowdown and struggles with the
largest state budget shortfall in history continue - the housing
affordability crisis also continues.
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In its October 2002 publication Locked Out 2002: California's
Affordable Housing Crisis Continues , the non-partisan California
Budget Project (CBP) notes that the "American Dream" of
homeownership is just a dream for many Californians.
"California's 2001 homeownership rate of 58.2 % was the fourth
lowest in the nation, behind the District of Columbia, New York,
and Hawaii. California's 2001 homeownership rate was about ten
percentage points below that of the nation." The CBP notes
(citing data from the California Association of Realtors) that
"the state's homeownership rates are lower than national
ownership rates largely due to the state's high cost of housing.
Nationally, 57 % of households could afford to purchase the
median-priced home in 2001, as compared to just 34 % of
households in California."
In November 2002 the voters of California approved Proposition
46 which will provide $2.1 billion in funds for various
low-income housing programs. The bond provides resources to
help fund the construction, rehabilitation and preservation of
affordable rental housing, emergency shelters and homeless
facilities, as well as funds that can be used to provide
downpayment assistance to low and moderate income first-time
homebuyers. Seniors, families with children, teachers, disabled
persons, veterans and working people will benefit from the bond.
Of that amount $117.5 million is available for downpayment
assistance.
According to the sponsor, California Neighborworks Network,
"this measure would permit, for example, homeowners to receive
$10,000 rather than $5,000 in downpayment assistance. This
would provide a greater level of assistance, particularly in
higher cost areas, and assist in the Governor's efforts to spend
housing bond funds rapidly in order to create jobs."
Homeownership In Revitalization Areas Program (HIRAP), created
by Proposition 46, provides deferred payment, simple interest
rate junior loans of an amount up to three percent of the
purchase price or appraised value, whichever is less. Interest
will be calculated at 3 % simple interest. The junior loan may
be used for downpayment or closing costs and may be combined
with a CalHFA or non-CalHFA conventional or government first
mortgage loan.
HIRAP is intended for low income first-time homebuyers anywhere
AB 304
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in California. If homebuyers are using a CalHFA first mortgage,
they may combine the assistance with a CHAP loan, and other
downpayment assistance programs offered by local government
agencies and nonprofit organizations.
This bill would increase the assistance amount for HIRAP loans
from 3 % to 6 % of the purchase price of the home.
Analysis Prepared by : Hubert Bower / H. & C.D. / (916)
319-2085
FN: 0000743