BILL ANALYSIS �
AB 2161
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2161 (Chau) - As Amended: April 23, 2014
Policy Committee: Housing and
Community Development Vote: 5 - 2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the Department of Housing and Community
Development (HCD), at the request of a borrower of any loan
issued by the department that has reached maturity, to either
reloan the original amount of the matured loan plus any accrued
interest on the same terms and conditions as the original loan,
or restructure the loan pursuant to a streamlined process
authorized by AB 1699 (Torres) (2012), Chapter 780.
FISCAL EFFECT
Minor and absorbable costs to the Department of Housing and
Community Development.
COMMENTS
Purpose . In 2012, AB 1699 (Torres) gave HCD the authority to
extend and modernize the older multifamily housing loans in its
portfolio through conversion to its more recent Multifamily
Housing Program. The purpose was to streamline the loan
restructuring process and to keep the affected units affordable.
With many of these older loans, once the loan is paid off, the
regulatory agreement which requires the units to remain
affordable is extinguished. Many affordable housing providers
would like to keep their projects affordable, but need to take
on additional debt financed with a low interest rate.
The terms of the streamlined process in AB 1699 are required to
be spelled out in guidelines that have not yet been adopted.
Some of the loans for projects that want to use the AB 1699
guidelines to restructure have reached maturity. It is unclear
AB 2161
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if HCD has discretion to modify a loan that's term has ended. AB
2161 would explicitly give HCD two options to do so.
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
319-2081