Bill Text: CA SB224 | 2009-2010 | Regular Session | Chaptered
Bill Title: Housing assistance.
Sponsorship: Slight Partisan Bill (Democrat 3-1)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State. Chapter 172, Statutes of 2009. [SB224 Detail]
Download: California-2009-SB224-Chaptered.html
BILL NUMBER: SB 224 CHAPTERED
BILL TEXT
CHAPTER 172
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE AUGUST 17, 2009
PASSED THE ASSEMBLY JULY 9, 2009
AMENDED IN ASSEMBLY JULY 6, 2009
AMENDED IN ASSEMBLY MAY 27, 2009
AMENDED IN SENATE APRIL 21, 2009
INTRODUCED BY Senator Correa
(Principal coauthor: Assembly Member Salas)
(Coauthors: Assembly Members Harkey and Ma)
FEBRUARY 23, 2009
An act to amend Sections 50650.3, 50650.4, and 51504 of the Health
and Safety Code, relating to housing, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 224, Correa. Housing assistance.
(1) Existing law establishes the CalHome Program under the
administration of the Department of Housing and Community Development
and authorizes funds appropriated for purposes of the program to be
used to enable low- and very low income households to become or
remain homeowners. The program authorizes the use of grant funds for,
among other things, home rehabilitation. Existing administrative
regulations require installation of an ignition resistant
construction system only when a manufactured home, mobilehome,
multifamily manufactured home, or commercial modular is installed in
designated areas.
This bill would provide that home rehabilitation includes the
installation or retrofit of ignition resistant exterior components on
existing manufactured homes, mobilehomes, and accessory structures
required pursuant to specified administrative regulations. The bill
would prohibit rehabilitation funding for these purposes under a
specified circumstance.
(2) Under the CalHome Program, the department provides the program
funds to local public agencies or nonprofit corporations as either
grants or loans to assist home ownership and requires them to meet
prescribed criteria. In administering the program, the department is
authorized to permit local public agencies and nonprofit corporations
to apply their own guidelines with respect to the use of CalHome
funds.
This bill would prohibit a local public agency and a nonprofit
corporation from denying funding or applying different underwriting
guidelines to a housing program or project solely on the basis that
the home is a manufactured home or mobilehome or the home is located
in a mobilehome park or a manufactured housing community.
(3) Existing law requires the California Housing Finance Agency to
administer the California Homebuyer's Downpayment Assistance Program
for the purpose of assisting first-time low- and moderate-income
home buyers utilizing existing mortgage financing. Under the program,
the amount of the downpayment assistance is due and payable at the
end of the term or upon sale of or refinancing of the home.
This bill would authorize the agency, in its discretion, to permit
the downpayment assistance loan to be subordinated to refinancing if
it determines that certain criteria have been met. The bill would
authorize the agency to permit subordination on those terms and
conditions as it determines are reasonable.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 50650.3 of the Health and Safety Code is
amended to read:
50650.3. (a) Funds appropriated for purposes of this chapter
shall be used to enable low- and very low income households to become
or remain homeowners. Funds shall be provided by the department to
local public agencies or nonprofit corporations as either of the
following:
(1) Grants for programs that assist individual households.
(2) Loans that assist development projects involving multiple home
ownership units, including single-family subdivisions.
(b) (1) Grant funds may be used for first-time homebuyer
downpayment assistance, home rehabilitation, including the
installation or retrofit of ignition resistant exterior components on
existing manufactured homes, mobilehomes, and accessory structures
required pursuant to Article 2.3 (commencing with Section 4200) of
Subchapter 2 of Chapter 3 of Division 1 of Title 25 of the California
Code of Regulations, homebuyer counseling, home acquisition and
rehabilitation, or self-help mortgage assistance programs, or for
technical assistance for self-help and shared housing home ownership.
(2) Home rehabilitation funding for the purpose of installing
ignition resistant components on manufactured homes, mobilehomes, or
accessory structures pursuant to this subdivision shall not be
conditioned upon the rehabilitation of additional or unrelated home
components unless that rehabilitation is required pursuant to Article
2.3 (commencing with Section 4200) of Subchapter 2 of Chapter 3 of
Division 1 of Title 25 of the California Code of Regulations. In
administering funding for this purpose, local public agencies and
nonprofit corporations may consider the condition and age of the
manufactured home or mobilehome, including whether the home was
constructed on or after June 15, 1976, in accordance with federal
standards and whether the available funds could be more effectively
used to replace the manufactured home or mobilehome.
(c) Loan funds may be used for purchase of real property, site
development, predevelopment, and construction period expenses
incurred on home ownership development projects, and permanent
financing for mutual housing or cooperative developments. Upon
completion of construction, the department may convert project loans
into grants for programs of assistance to individual homeowners.
Financial assistance provided to individual households shall be in
the form of deferred payment loans, repayable upon sale or transfer
of the homes, when they cease to be owner-occupied, or upon the loan
maturity date. Financial assistance may be provided in the form of a
secured forgivable loan to an individual household to rehabilitate,
repair, or replace manufactured housing located in a mobilehome park
and not permanently affixed to a foundation. The loan shall be due
and payable in 20 years, with 10 percent of the original principle to
be forgiven annually for each additional year beyond the 10th year
that the home is owned and continuously occupied by the borrower. Not
more than 10 percent of the funds available for the purposes of this
chapter in a fiscal year shall be used for financial assistance in
the form of secured forgivable loans.
(d) All loan repayments shall be used for activities allowed under
this section, and shall be governed by a reuse plan approved by the
department. Those reuse plans may provide for loan servicing by the
grant recipient or a third-party local government agency or nonprofit
corporation.
SEC. 2. Section 50650.4 of the Health and Safety Code is amended
to read:
50650.4. (a) To be eligible to receive a grant or loan, local
public agencies or nonprofit corporations shall demonstrate
sufficient organizational stability and capacity to carry out the
activity for which they are requesting funds, including, where
applicable, the capacity to manage a portfolio of individual loans
over an extended time period. Capacity may be demonstrated by
substantial successful experience performing similar activities, or
through other means acceptable to the department. In administering
the CalHome program, the department may permit local agencies and
nonprofit corporations to apply their own underwriting guidelines
when evaluating CalHome rehabilitation loan applications, following
prior review and approval of those guidelines by the department. The
local agency or nonprofit corporation shall not subsequently alter
its underwriting guidelines with respect to the use of CalHome funds
without review and approval by the department. In allocating funds,
the department shall utilize a competitive application process, using
weighted evaluation criteria, including, but not limited to, the
extent that the program or project utilizes volunteer or self-help
labor, trains youth and young adults in construction skills, creates
balanced communities, involves community participation, or whether
the program or project contributes toward community revitalization.
To the extent feasible, the application process shall ensure a
reasonable geographic distribution of funds.
(b) In administering department funds received pursuant to
subdivision (a), local public agencies and nonprofit corporations
shall not deny the funding application of, or apply different
underwriting guidelines to, a housing program or project solely on
the basis of either of the following:
(1) The home is a manufactured home or mobilehome, as defined in
Sections 18007 and 18008.
(2) The home is located in a mobilehome park or in a manufactured
housing community, as defined in Sections 18210.7 and 18214.
SEC. 3 Section 51504 of the Health and Safety Code is amended to
read:
51504. (a) The agency shall administer a downpayment assistance
program that includes, but is not limited to, all of the following:
(1) Downpayment assistance shall include, but not be limited to, a
deferred-payment, low-interest, junior mortgage loan to reduce the
principal and interest payments and make financing affordable to
first-time low- and moderate-income home buyers.
(2) (A) Except as provided in subparagraph (B) or (C), the amount
of downpayment assistance shall not exceed 3 percent of the home sale
price.
(B) The amount of downpayment assistance for a new home within an
infill opportunity zone, as defined in Section 65088.1 of the
Government Code, a transit village development district, as defined
in Section 65460.4 of the Government Code, or a transit-oriented
development specific plan area, as defined in paragraph (6), shall
not exceed 5 percent of the purchase price or the appraised value,
whichever amount is less, of the new home. The borrower of the
downpayment assistance shall provide the lender originating the loan
with a certification from the local government agency administering
the infill opportunity zone, the transit village development
district, or the transit-oriented development specific plan area that
states that the property involved in the loan transaction is within
the boundaries of either the infill opportunity zone, the transit
village development district, or the transit-oriented development
specific plan area.
(C) Notwithstanding paragraph (1), the agency may, but is not
required to, provide downpayment assistance that does not exceed 6
percent of the home sale price to first-time low-income home buyers
who, as documented to the agency by a nonprofit organization that is
certified and funded to provide home ownership counseling by a
federally funded national nonprofit corporation, are purchasing a
residence in a community revitalization area targeted by the
nonprofit organization as a neighborhood in need of economic
stimulation, renovation, and rehabilitation through efforts that
include increased home ownership opportunities for low-income
families. The agency shall not use more than six million dollars
($6,000,000) in funds made available pursuant to Section 53533 for
the purposes of this paragraph.
(3) The amount of the downpayment assistance shall be secured by a
deed of trust in a junior position to the primary financing
provided. The term of the loan for the downpayment assistance shall
not exceed the term of the primary loan.
(4) (A) Except as provided in subparagraph (B), the amount of the
downpayment assistance shall be due and payable at the end of the
term or upon sale of or refinancing of the home. The borrower may
refinance the mortgages on the home provided that the principal and
accrued interest on the junior mortgage loan securing the downpayment
assistance are repaid in full. All repayments shall be made to the
agency to be reallocated for the purposes of this chapter.
(B) The agency may, in its discretion, permit the downpayment
assistance loan to be subordinated to refinancing if it determines
that the borrower has demonstrated hardship, subordination is
required to avoid foreclosure, and the new loan meets the agency's
underwriting requirements. The agency may permit subordination on
those terms and conditions as it determines are reasonable.
(5) The agency may use up to 5 percent of the funds appropriated
by the Legislature for purposes of this chapter to administer this
program.
(6) For purposes of this section, "transit-oriented development
specific plan area" means a specific plan that meets the criteria set
forth in Section 65451 of the Government Code, is centered around a
rail or light-rail station, ferry terminal, bus hub, or bus transfer
station, and is intended to achieve a higher density use of land that
facilitates use of the transit station.
(b) In addition to the downpayment assistance program authorized
by subdivision (a), the agency may, at its discretion, use not more
than seventy-five million dollars ($75,000,000) of the funds
available pursuant to this chapter to finance the acquisition of land
and the construction and development of for-sale residential
structures, through short-term loans pursuant to its authority
pursuant to Section 51100. However, the agency shall make downpayment
assistance provided pursuant to paragraph (1), subparagraphs (A) and
(B) of paragraph (2), and paragraphs (3) to (5), inclusive, of
subdivision (a) the priority use for these funds. A loan made
pursuant to this section is not subject to Article 4 (commencing with
Section 51175) of Chapter 5.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to ensure that homeowners are able to refinance home
loans at the earliest possible time to avoid foreclosure, it is
necessary that this act take effect immediately.
