Housing programs: financing.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Chaptered
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Overview
This bill modifies California’s Housing and Home Finance Act to clarify how property owners with properties subject to department regulatory agreements can access additional financing. Specifically, it expands the definition of ‘extracted equity’ to include funds used for reimbursing borrower advances related to predevelopment costs, capital improvements, and operating deficits. The department must approve these requests, and the new debt must meet certain financial requirements, including a minimum debt-service coverage ratio and remain subordinate to the department’s lien.
Key provisions
- Expands the definition of ‘extracted equity’ to include reimbursement of borrower advances.
- Requires the Department of Housing and Community Development to allow additional debt financing for property rehabilitation and new affordable housing projects.
- Sets financial requirements for new debt, including a minimum debt-service coverage ratio of 1.15 and projected positive cash flow.
- Defines ‘extracted equity’ as debt secured by a department-regulated property not used for approved project rehabilitation, debt repayment, or reserve replenishment.
- Allows extracted equity to be used for project reserves, repairs, and improvements.
- Requires new debt to be subordinate to the department’s lien unless deemed necessary for project feasibility.
- Maintains the existing regulatory agreement’s priority during the project’s term.
- Continues to require monitoring fees for compliance.
Who is affected
Bill text
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