BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1036
                                                                  Page  1

          Date of Hearing:   April 29, 2003

                       ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
                                 Nicole Parra, Chair
                 AB 1036 (Mullin) - As Introduced:  February 20, 2003

           SUBJECT  :   Cal-Vet Loans

           SUMMARY  :   Increases loan amounts for farm and mobilehome loans  
          and permits home improvement loans.  Specifically,  this bill  : 
           
          1.Increases the maximum size of Cal-Vet farm loans to 150% of  
            the maximum Cal-Vet home loan.  The home loan limit is set at  
            the annual Fannie Mae loan limit, currently $322,700.

          2.Increases the maximum Cal-Vet mobilehome loan to $125,000 from  
            $70,000.

          3.Allows Cal-Vet to offer veterans home improvement loans  
            subordinate to a non Cal-Vet first mortgage.

           EXISTING LAW  establishes the Cal-Vet Farm and Home Loan program  
          financed by general obligation and revenue bonds.  The Cal-Vet  
          program operates under maximum loan amounts established in  
          statute.  Cal-Vet can offer home improvement loans that are  
          superior to any other financing.

           FISCAL EFFECT  :   No general fund impact.  Cal-Vet program costs  
          are paid through revenue generated by loan payments from  
          borrowers.

           COMMENTS  :   The Cal-Vet program has served California veterans  
          and taxpayers well since its creation at the turn of the last  
          century.  Countless veterans have been able to purchase farms,  
          homes and mobilehomes they might not otherwise have been able to  
          afford and the taxpayers have never had to subsidize the  
          program.  But the declining veterans population and the federal  
          limits on General Obligation bond loans have limited its value  
          in recent years.  This bill and AB 1736 (Committee on Veterans  
          Affairs) are designed to enable Cal-Vet to meet the current  
          needs of veteran homebuyers within the restrictions of federal  
          law.

           REGISTERED SUPPORT / OPPOSITION  :   









                                                                  AB 1036
                                                                  Page  2

           Support 
           
          California Department of Veterans Affairs - Sponsor

           Opposition 
          
          None on file.

           
          Analysis Prepared by  :    Burt McChesney / V. A. / (916) 319-3550