BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1036|
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THIRD READING
Bill No: AB 1036
Author: Mullin (D), et al
Amended: 9/2/03 in Senate
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE : 6-0, 7/8/03
AYES: Morrow, Knight, Denham, Ducheny, Dunn, Soto
NO VOTE RECORDED: Chesbro
SENATE APPROPRIATIONS COMMITTEE : 12-0, 8/29/03
AYES: Alpert, Battin, Aanestad, Ashburn, Bowen, Burton,
Escutia, Johnson, Karnette, Machado, Murray, Poochigian
NO VOTE RECORDED: Speier
ASSEMBLY FLOOR : 77-0, 5/29/03 - See last page for vote
SUBJECT : Veterans: Cal-Vet loans
SOURCE : State Department of Veterans Affairs
DIGEST : This bill makes numerous changes to the Veterans
Farm and Home Purchase Act of 1974.
ANALYSIS :
Existing Law
1.Authorizes the State Department of Veterans Affairs to
assist qualified veterans in purchasing farms and homes,
including mobilehomes.
CONTINUED
AB 1036
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2.Limits the amount that DVA can expend under the Cal-Vet
program in assisting veterans acquire different types of
home and farms. Under current law, DVA cannot loan more
than $70,000 for a mobilehome that is located in a
mobilehome park, and no more than $300,000 for a farm.
3.Provides for the Veterans' Farm and Home Building Fund of
1943 and authorizes DVA to expend money from the Fund for
purposes of, among others, of advancing to a Cal-Vet
purchaser money to make alterations, repairs, or
improvements on their principal place of residence.
4.Existing state regulations allow a Cal-Vet purchaser to
borrow against purchaser's equity in a farm or home if
DVA's interest in the property is prior and senior to any
other financing on that farm or home.
This bill:
1.Increases the expenditure limits on the purchase of
mobilehomes and farms under the Veterans' Farm and Home
Purchase Act, allows second loans in which DVA's security
interest is subordinate to an existing loan, authorizes
DVA to waive the down payment in specified instances, and
authorizes the use of specified funds for deferred
payments o second mortgage loans.
2.Increases the expenditure limit on the purchase of
mobilehomes from $u70,000 to $125,000, and increases the
limit on farms from $300,000 to an equivalent of 150
percent of the maximum Fannie Mae loan limit
(approximately $484,050). With rising land and home
prices in California, the existing limits are not
reflective of current costs.
The Veterans' Farm and Home Purchase Act of 1974 authorizes
DVA to assist veterans in acquiring homes and farms by
providing that DVA may purchase the home or farm and then
sell it to a purchaser. The Act additionally allows
purchasers to borrow against their home equity for loans
used to make repairs, alterations, or improvements only if
DVA's interest remains senior to any other financing on
that farm or home.
AB 1036
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The Cal-Vet program's Farm and Home Building Fund of 1943
is funded through revenue bonds and self liquidating
general obligation bonds.
Comments
This bill is sponsored by DVA to amend the Military and
Veterans Code to increase the amount of a Cal-Vet loan for
mobilehomes located in a mobilehome park and for the
purchase of a farm, and to ease the rules for financing
Cal-Vet home imrpovements.
The maximum amount that DVA can loan to a qualified veteran
for a home, farm, or mobilehome is set by legislation and
can only be changed by legislative action.
The current maximum loan amount for a home is $322,700; for
a farm $300,000, and for a mobilehome sited in a mobilehome
park $70,000. The maximum amount for a home is keyed to
the Fannie Mae index, which is updated regularly. Until
the passage of SB 1893 (Chapter 473, Statutes of 2002) last
year the maximum home loan amount was set at $250,000.
Basically, DVA indicates that because of rising land and
home prices across California there is a need to increase
the maximum loan amounts for farms from the current
$300,000 to $484,050, which represent 150 percent of the
current Fannie Mae home purchase price for a single family
home.
By the same reasoning, DVA notes the increase in the price
of mobilehomes and proposes to increase the maximum Cal-Vet
home loan amount for mobilehome sited in mobilehome parks
from the present $70,000 to $125,000.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/8/03) (Per Sen. Veterans Affairs
Committee analysis)
State Department of Veterans Affairs (source)
American Federation of State, County and Municipal
Employees
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ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Canciamilla, Chan, Chavez, Chu, Cogdill, Cohn, Corbett,
Correa, Cox, Daucher, Diaz, Dutra, Dutton, Dymally,
Firebaugh, Frommer, Garcia, Goldberg, Hancock, Harman,
Haynes, Jerome Horton, Shirley Horton, Houston, Jackson,
Keene, Kehoe, Koretz, La Malfa, La Suer, Laird, Leno,
Leslie, Levine, Lieber, Liu, Longville, Lowenthal,
Maddox, Maldonado, Matthews, Maze, McCarthy, Montanez,
Mountjoy, Mullin, Nakanishi, Nakano, Nation, Negrete
McLeod, Nunez, Oropeza, Pacheco, Parra, Plescia, Reyes,
Richman, Ridley-Thomas, Runner, Salinas, Samuelian,
Simitian, Spitzer, Steinberg, Strickland, Vargas,
Wiggins, Wolk, Wyland, Yee, Wesson
TSM:cm 8/29/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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