BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1036
                                                                  Page  1

          ASSEMBLY THIRD READING
          AB 1036 (Mullin)
          As Introduced February 20, 2003
          Majority vote 

           VETERANS AFFAIRS    14-0        APPROPRIATIONS      24-0        
           
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          |Ayes:|Parra, Dutton, Cohn,      |     |                          |
          |     |Harman, Kehoe, Matthews,  |     |                          |
          |     |Mountjoy, Mullin, Nakano, |     |                          |
          |     |Runner, Salinas, Spitzer, |     |                          |
          |     |Wiggins, Wyland           |     |                          |
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           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 (GO) 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 GO bond loans have limited its value in recent years.   








                                                                  AB 1036
                                                                  Page  2

          This bill and AB 1736 (Veterans Affairs Committee), pending in  
          the Assembly, are designed to enable Cal-Vet to meet the current  
          needs of veteran homebuyers within the restrictions of federal  
          law.

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




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