BILL ANALYSIS Ó
AB 697
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Date of Hearing: April 27, 2011
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
AB 697 (V. Manuel Perez) - As Amended: April 4, 2011
SUBJECT : Veteran: acquisition of home: interest of record.
SUMMARY : Allows the CalVet Home Loan Program (CalVet) within
the California Department of Veterans Affairs (CDVA) to
refinance existing mortgage loans. Specifically, this bill :
1)Allows CDVA to acquire a home in which the veteran has an
interest of record for the purpose of refinancing an existing
mortgage loan.
2)Specifies that funds used by CDVA for refinancing existing
mortgage loans shall be used in accordance with federal laws
and regulations governing the use of qualified mortgage bonds
and qualified veterans' mortgage bonds.
3)Requires CDVA to adopt and publish any rules and regulations
necessary to allow CalVet to refinance existing mortgage
loans.
EXISTING LAW
1)Provides for farm and home purchase benefits for qualifying
veterans under the Veterans' Farm and Home Purchase Act of
1974 and subsequent acts, which are collectively referred to
as the CalVet Home Loan Program (Military and Veterans Code
Section 987.50, et seq.).
2)Allows the CalVet program to be used to acquire a home in
which the veteran has an interest of record only in limited
circumstances, including:
a) Where the application is for aid for the construction of
a home upon real property owned by the applicant and the
improvements to be constructed thereon have not reached
completion as evidenced by the issuance of a certificate of
occupancy.
b) Where the veteran had no interest of record in the
property at the time of filing his or her application and
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thereafter secured interim financing pending the processing
and approval of the application by the department.
c) Where the application is for the purchase of a
mobilehome to be situated upon real property, or an
undivided interest therein, owned by the applicant.
d) Where the applicant is an Indian veteran and the
application is for the construction of a dwelling house or
other improvements on, or for the purchase of a mobilehome
to be sited on, trust land in which the Indian veteran has
a beneficial interest or owns an interest of record.
e) Where the application is for assistance to enable the
veteran to purchase his or her space or share in a
mobilehome park that is converted from a rental park to a
nonprofit corporate resident-owned park or subdivision,
cooperative, or condominium for mobilehomes, in which the
veteran resides in his or her mobilehome.
(Military and Veterans Code Section 987.85)
FISCAL EFFECT : Unknown
COMMENTS :
The CalVet Home Loan Program, operated by the California
Department of Veterans Affairs, offers home loans to qualified
veterans at competitive interest rates with a low or no down
payment. The program provides loans for single-family
residences, including condominiums and planned unit
developments; farms; units in cooperative developments; and
mobilehomes in rental parks or on land owned by the veteran.
Properties purchased with a CalVet loan must be owner-occupied
and located in the state.
Funding for the CalVet program comes primarily from general
obligation bonds that are repaid through monthly mortgage
payments. The program has no General Fund costs. Voters have
passed 23 veterans bonds since 1943 to provide funding for
CalVet. The last veterans' bond to pass was Proposition 12 in
2008, which authorized $900,000,000 in bonds for the program.
Under current law, CalVet can only be used to purchase a new
property that the veteran does not already own, with a few
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narrow exceptions. It cannot assist a veteran who already owns a
home but who may want to refinance his or her mortgage. AB 697
would change this to allow CalVet to refinance existing
mortgages that are currently held by another bank, thus
expanding the number of veterans who could take advantage of the
program.
Double referred : The Assembly Committee on Rules referred AB
697 to the Committee on Veterans Affairs and Housing and
Community Development. This bill is schedule to be heard in the
Committee on Veterans Affairs on April 26, 2011.
REGISTERED SUPPORT / OPPOSITION :
Support
American Legion-Department of California
AMVETS-Department of California
California Association of County Veterans Service Officers
California State Commanders Veterans Council
Vietnam Veterans of America-California State Council
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085