Today's Law As Amended


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AB-561 Help Homeowners Add New Housing Program: accessory dwelling unit financing.(2021-2022)



As Amends the Law Today


SECTION 1.
 The Legislature finds and declares all of the following:
(a) Over the last few years, the state has lowered the regulatory barriers that have historically prevented homeowners from developing additional housing units, such as accessory dwelling units and junior accessory dwelling units, on their single-family home properties. As a result, construction of these units has increased by 50 percent and added much needed housing. In the City of Los Angeles, the number of permits for accessory dwelling unit construction has soared by nearly 3,500 percent from 2016 to 2018, inclusive.
(b) However, the construction of these additional units remains limited in many areas of the state due to a lack of financing options for the cost of construction if a homeowner lacks significant appreciated equity within their residence to refinance or sufficient income to increase their loan balances.
(c) Far too many homeowners, even those with strong credit scores, documented income, and favorable loan-to-value ratios, cannot readily access federal government-backed mortgages to finance the costs of building additional units because mortgage products currently require tenants in place and a year or more of documented rental income.
(d) Addressing this gap in the marketplace and allowing existing mortgage lenders to offer construction bridge loans would enable homeowners to take advantage of historically low mortgage interest rates that will likely be available during the next several years.
(e) It is the intent of the Legislature to establish a state-backed lending mechanism to encourage banks, credit unions, and other mortgage originators to make construction loans to homeowners to bridge existing federally backed loans.

SEC. 2.

 Chapter 12 (commencing with Section 51515) is added to Part 3 of Division 31 of the Health and Safety Code, to read:

CHAPTER  12. Help Homeowners Add New Housing Program
51515.
 This chapter shall be known, and may be cited, as the Help Homeowners Add New Housing Program.
51516.
 For purposes of this chapter:
(a) “Homeowner” means an owner of a single-family residential property that does not own more than three residential properties that consist of one to four units.
(b) “Program” means the program established pursuant to subdivision (a) of Section 51517.
51517.
 (a) The Treasurer’s office may, within six months of the effective date of this chapter, establish and administer the Help Homeowners Add New Housing Program pursuant to this chapter. The purpose of the program is to assist homeowners in qualifying for loans to construct additional housing units on their property, including accessory dwelling units and junior accessory dwelling units.
(b) (1) The Treasurer may consult with the Department of Housing and Community Development and the California Housing Financing Agency in establishing and administering the program. The Treasurer may also consult with other entities in developing the program, including private lenders, community development financial institutions, community-based organizations, local housing trust funds, joint powers authorities, regional housing finance authorities, and credit unions.
(2) The California Housing Financing Agency shall not be affiliated with the program in any financial capacity.