BILL NUMBER: AB 1036	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Mullin

                        FEBRUARY 20, 2003

   An act to amend Sections 987.65 and 988.4 of the Military and
Veterans Code, relating to veterans.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1036, as introduced, Mullin.  Veterans:  Cal-Vet loans.
   The Veterans' Farm and Home Purchase Act of 1974 authorizes the
Department of Veterans Affairs to assist veterans in acquiring homes
and farms by generally providing that the department may purchase a
farm or home which the department then sells to a purchaser, as
defined.  Existing law limits the amount that the department may
expend for these purposes in acquiring different types of homes and
farms and provides that the department may not expend more than
$70,000 for a mobilehome that is to be sited in a mobilehome park, as
defined, nor more than $300,000 for a farm, as defined.
   This bill would change these expenditure limits to $125,000 in the
case of a mobilehome that is to be sited in a mobilehome park and,
in the case of a farm, to 150% of the maximum Fannie Mae loan limit,
as provided.
   Existing law provides for the Veterans' Farm and Home Building
Fund of 1943 and authorizes the department to expend moneys from that
fund for, among other purposes, advancing to a purchaser sums for
the purpose of making alterations, repairs, or improvements on or in
connection with the principal place of residence of the purchaser.
Existing state regulations allow a purchaser to borrow against that
purchaser's equity in a farm or home that the department assisted
that purchaser in acquiring only if, among other conditions, the
department's interest in the home is prior and senior to any other
financing on that farm or home.
   This bill would authorize the department to secure the advances
described above with a security interest that is subordinate to any
existing financing on that residence.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


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


  SECTION 1.  Section 987.65 of the Military and Veterans Code is
amended to read:
   987.65.  (a) The purchase price of a home to the department, or
the sum to be expended by the department pursuant to a contract for
the construction of a dwelling house and other improvements, or the
purchase price of a mobilehome sited on a lot owned by the purchaser
and installed on a foundation system pursuant to Section 18551 of the
Health and Safety Code, or the purchase price of a mobilehome
converted to a fixture and improvement to the underlying real
property in a mobilehome park that has been converted to a
resident-owned subdivision, cooperative, condominium, or nonprofit
corporation as set forth in Section 18555 of the Health and Safety
Code,  shall   may  not exceed the then
current maximum Fannie Mae loan limit  that is annually set by
Fannie Mae  for a single-family home  that is annually
set by Fannie Mae  .
   (b) The purchase price of a mobilehome that is to be sited in a
mobilehome park, as defined in Section 18214 of the Health and Safety
Code, in addition to any assistance provided by the department to a
veteran pursuant to subdivision (e) of Section 987.85,  shall
  may  not exceed  seventy  
one hundred twenty-five  thousand dollars  ($70,000)
  ($125,000)  .
   (c) A veteran purchasing the home may advance, subject to Section
987.64, the difference between the total price or cost of the home
and the sum of the purchase price of the home to the department and
any amount the department adds, under Section 987.69, to the purchase
price of the home in fixing the selling price to the veteran.  Any
amount of the purchase price to the department may be provided by
funds from participation contracts or revenue bonds.
   (d) The purchase price of a farm to the department  shall
  may  not exceed  three hundred thousand
dollars ($300,000)   150 percent of the current maximum
Fannie Mae loan limit described in subdivision (a)  .  A veteran
purchasing the farm may advance the difference between the total
price of the farm, or the cost of the dwelling and improvements to be
constructed on a farm under a contract, and the sum of the purchase
price to the department or contract price to the department and any
amount that the department adds, under Section 987.69, to the
purchase or contract price to the department in fixing the selling
price of the farm to the veteran.
  SEC. 2.  Section 988.4 of the Military and Veterans Code is amended
to read:
   988.4.  (a) For purposes of this section, "purchaser" includes any
veteran whose only loan with the department is for the purpose of a
home improvement on property that is the principal place of residence
of the veteran.
   (b)  (1)  Out of any money available in the Veterans'
Farm and Home Building Fund of 1943, the department may advance to a
purchaser upon his or her application, and under the policies as the
department may, from time to time, prescribe, sums for the purpose of
making alterations, repairs, or improvements on or in connection
with the principal place of residence of the purchaser.  
   (2) Notwithstanding any other provision of law, in making the
advances described in paragraph (1), the department may secure that
advance by issuing a deed of trust, a promissory note, or other
security interest that is subordinate to any existing financing on
the principal place of residence of the purchaser. 
   (c) The department shall be the sole judge of the need and
desirability of making advances and the method of repayment by the
purchaser under this section.