SB 1032: Housing finance: portfolio restructuring: loan forgiveness.

Existing law establishes various rental housing finance programs administered by the Department of Housing and Community Development. Existing law authorizes the department to monitor and fund various multifamily housing loans. With respect to these programs and loans, existing law authorizes the department to approve an extension of a department loan, the reinstatement of a qualifying unpaid matured loan, the subordination of a department loan to new debt, or an investment of tax credit equity pursuant to specified rental housing finance programs and multifamily housing loans administered, monitored, or funded by the department, subject to specified requirements.

This bill would additionally authorize the department to forgive the full amount of the principal, interest, fees, and other outstanding balances of the above-described loans, including the full amounts of the principal, interests, fees, and any other outstanding balances of specified department loans, loans if the borrower shows that the loan is impeding their ability to maintain and operate the project, as specified. makes specified showings. The bill would require that projects receiving loan forgiveness meet specified requirements, including that the projects maintain the same number of affordable units at the same affordable housing cost as provided in the projects regulatory agreement. agreement, except as specified. The bill would authorize borrowers to appeal a loan forgiveness decision to the Secretary of Business, Consumer Services, and Housing for reconsideration.

This bill would make findings and declarations related to a gift of public funds.