BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 697
                                                                  Page  1

          Date of Hearing:   May 11, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                 AB 697 (V. Manuel Perez) - As Amended:  May 4, 2011 

          Policy Committee:                              Vets Vote:7-0
                        Housing                                   7-0
                                                                  
          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill authorizes the CalVet Home Loan Program (CalVet) 
          within the California Department of Veterans Affairs (DVA) to 
          acquire a home in which the veteran has an interest of record 
          for the purpose of refinancing an existing mortgage loan. 

           FISCAL EFFECT  

          Minor costs to the unrestricted portion of CalVet bonds to the 
          extent CalVet opts to pursue refinancing. CDVA does not believe 
          the amount will be significant.   

          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.  

           COMMENTS  

           Rationale.  The CalVet Home Loan Program, operated by CDVA, 
          offers home loans to qualified veterans at competitive interest 
          rates with a low or no down payment. Properties purchased with a 
          CalVet loan must be owner-occupied and located in the state. 

          Under current law, CalVet can only be used to purchase a new 
          property the veteran does not already own, with a few 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 








                                                                  AB 697
                                                                  Page  2

          are currently held by another bank, thus expanding the number of 
          veterans who could take advantage of the program.
           
           
           Analysis Prepared by  :    Geoff Long / APPR. / (916) 319-2081