Existing law establishes the California Housing Finance Agency with a primary purpose of meeting the housing needs of persons and families of low or moderate income. Existing law requires the California Housing Finance Agency to administer various housing finance assistance programs, including, among others, the Roberti-Greene Home Purchase Assistance Program, which provides first-time home buyers with home purchase assistance in the form of interest rate subsidies and downpayment assistance. Existing law authorizes the agency to create its own home purchase assistance programs, home purchase assistance products, or both, on such terms and conditions as the agency deems prudent. Existing law requires the agency to administer the Extra Credit Teacher Home Purchase Program, as specified, and any other school personnel home ownership assistance program that is set forth by the California Debt Limit Allocation Committee.

This bill would establish the Teacher Housing Assistance Pilot Program (pilot program) for the purpose of providing downpayment assistance to an eligible applicant who is teaching, or commits to teaching, in a high-cost county. The bill would require the California Housing Finance Agency, upon appropriation of money by the Legislature, to administer the pilot program, and would require the agency to adopt regulations to implement the pilot program. The bill would require downpayment assistance provided pursuant to the pilot program to comply with specified provisions. The bill would authorize an applicant to submit an application, which must contain certain information, to the agency to receive downpayment assistance under the pilot program. The bill would require the agency to review any application submitted to determine whether the applicant is eligible to receive downpayment assistance. The bill would require the agency when awarding downpayment assistance under the pilot program to give priority to certain types of eligible applicants.

This bill would create in the State Treasury the Teacher Housing Assistance Fund, and would provide that moneys in that fund, upon appropriation by the Legislature, be available to the agency for purposes of the pilot program.

This bill would provide that the pilot program shall become inoperative on January 1, 2023. The bill would require the agency on or before December 31, 2023, to submit a report to specified committees of the Legislature that must contain specified information relating to the demand and effectiveness of the pilot program, as well as a recommendation on whether the pilot program should be continued. The bill would repeal these provisions as of January 1, 2024.

Existing law establishes the California Housing Finance Agency with a primary purpose of meeting the housing needs of persons and families of low or moderate income. Existing law requires the California Housing Finance Agency to administer various housing finance assistance programs, including, among others, the Roberti-Greene Home Purchase Assistance Program, which provides first-time home buyers with home purchase assistance in the form of interest rate subsidies and downpayment assistance. Existing law authorizes the agency to create its own home purchase assistance programs, home purchase assistance products, or both, on such terms and conditions as the agency deems prudent. Existing law requires the agency to administer the Extra Credit Teacher Home Purchase Program, as specified, and any other school personnel home ownership assistance program that is set forth by the California Debt Limit Allocation Committee.

This bill would establish the Teacher Housing Assistance Pilot Program (pilot program) for the purpose of providing downpayment assistance to an eligible applicant who is teaching, or commits to teaching, in a high-cost county. The bill would require the California Housing Finance Agency, upon appropriation of money by the Legislature, to administer the pilot program, and would require the agency to adopt regulations to implement the pilot program. The bill would require downpayment assistance provided pursuant to the pilot program to comply with specified provisions. The bill would authorize an applicant to submit an application, which must contain certain information, to the agency to receive downpayment assistance under the pilot program. The bill would require the agency to review any application submitted to determine whether the applicant is eligible to receive downpayment assistance. The bill would require the agency when awarding downpayment assistance under the pilot program to give priority to certain types of eligible applicants.

This bill would create in the State Treasury the Teacher Housing Assistance Fund, and would provide that moneys in that fund, upon appropriation by the Legislature, be available to the agency for purposes of the pilot program.

This bill would provide that the pilot program shall become inoperative on January 1, 2023. The bill would require the agency on or before December 31, 2023, to submit a report to specified committees of the Legislature that must contain specified information relating to the demand and effectiveness of the pilot program, as well as a recommendation on whether the pilot program should be continued. The bill would repeal these provisions as of January 1, 2024.

Existing law establishes the California Housing Finance Agency with a primary purpose of meeting the housing needs of persons and families of low or moderate income. Existing law requires the California Housing Finance Agency to administer various housing finance assistance programs, including, among others, the Roberti-Greene Home Purchase Assistance Program, which provides first-time home buyers with home purchase assistance in the form of interest rate subsidies and downpayment assistance. Existing law authorizes the agency to create its own home purchase assistance programs, home purchase assistance products, or both, on such terms and conditions as the agency deems prudent. Existing law requires the agency to administer the Extra Credit Teacher Home Purchase Program, as specified, and any other school personnel home ownership assistance program that is set forth by the California Debt Limit Allocation Committee.

This bill would establish the Teacher Housing Assistance Pilot Program (pilot program) for the purpose of providing financial downpayment assistance to an eligible applicant who is teaching, or commits to teaching, in a high-cost county. The bill would require the California Housing Finance Agency, upon appropriation of money by the Legislature, to administer the pilot program, and would require the agency to adopt regulations to implement the pilot program. The bill would provide that financial assistance for purposes of the pilot program may include downpayment assistance or annual rental stipends. The bill would require downpayment assistance provided pursuant to the pilot program to comply with specified provisions. The bill would authorize an applicant to submit an application, which must contain certain information, to the agency to receive financial downpayment assistance under the pilot program. The bill would require the agency to review any application submitted to determine whether the applicant is eligible to receive financial downpayment assistance. The bill would require the agency when awarding grants downpayment assistance under the pilot program to give priority to certain types of eligible applicants.

This bill would create in the State Treasury the Teacher Housing Assistance Fund, and would provide that moneys in that fund, upon appropriation by the Legislature, be available to the agency for purposes of the pilot program.

This bill would provide that the pilot program shall become inoperative on January 1, 2023. The bill would require the agency on or before December 31, 2023, to submit a report to specified committees of the Legislature that must contain specified information relating to the demand and effectiveness of the pilot program, as well as a recommendation on whether the pilot program should be continued. The bill would repeal these provisions as of January 1, 2024.

Existing law establishes the California Housing Finance Agency with a primary purpose of meeting the housing needs of persons and families of low or moderate income. Existing law requires the California Housing Finance Agency to administer various housing finance assistance programs, including, among others, the Roberti-Greene Home Purchase Assistance Program, which provides first-time home buyers with home purchase assistance in the form of interest rate subsidies and downpayment assistance. Existing law authorizes the agency to create its own home purchase assistance programs, home purchase assistance products, or both, on such terms and conditions as the agency deems prudent. Existing law requires the agency to administer the Extra Credit Teacher Home Purchase Program, as specified, and any other school personnel home ownership assistance program that is set forth by the California Debt Limit Allocation Committee.

This bill would establish the Teacher Housing Assistance Pilot Program (pilot program) for the purpose of providing financial assistance to an eligible applicant who is teaching, or commits to teaching, in a high-cost county. The bill would require the California Housing Finance Agency Agency, upon appropriation of money by the Legislature, to administer the pilot program, and would require the agency to adopt regulations to implement the pilot program. The bill would provide that financial assistance for purposes of the pilot program may include downpayment assistance or annual rental stipends. The bill would authorize an applicant to submit an application, which must contain certain information, to the agency to receive financial assistance under the pilot program. The bill would require the agency to review any application submitted to determine whether the applicant is eligible to receive financial assistance. The bill would require the agency when awarding grants under the pilot program to give priority to certain types of eligible applicants.

This bill would transfer $50 million from the General Fund to the Teacher Housing Assistance Fund, which this bill would create as a continuously appropriated fund within the State Treasury, and would require the agency to use amounts in that fund in accordance with a specified schedule. This bill would state that funds appropriated by this bill would not be applied toward the minimum funding requirements for school districts and community college districts imposed by Section 8 of Article XVI of the California Constitution. create in the State Treasury the Teacher Housing Assistance Fund, and would provide that moneys in that fund, upon appropriation by the Legislature, be available to the agency for purposes of the pilot program.

This bill would provide that the pilot program shall become inoperative on January 1, 2023, or on the date that the agency certifies that all funds in the Teacher Housing Assistance Fund have been awarded. 2023. The bill would require the agency to, within one year after the pilot program becomes inoperative, on or before December 31, 2023, to submit a report to specified committees of the Legislature that must contain specified information relating to the demand and effectiveness of the pilot program, as well as a recommendation on whether the pilot program should be continued. The bill would repeal these provisions as of January 1, 2024.

Existing law requires the State Department of Education to apportion funds for community school and independent study average daily attendance only for average daily attendance claimed by school districts and county superintendents of schools for pupils who officially reside in the county in which the apportionment claim is reported, or who officially reside in a county immediately adjacent to the county in which the apportionment claim is reported.

This bill would make nonsubstantive change in those provisions.

Date of Hearing: May 17, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1182

Author:(Low) – As Amended Ver:May 10, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill establishes, until January 1, 2023, the Teacher Housing Assistance Pilot Program (pilot program) to be administered by the California Housing Finance Agency (CalHFA), subject to an appropriation for this purpose by the Legislature. Specifically, this bill:

1. Declares the purpose of the pilot program is to assist new and experienced teachers, who are currently teaching or have committed to teach in a high-cost county to obtain housing within the county in which they are living or have committed to teach.
2. Defines "high-cost county" as a county where the median housing cost exceeds $500,000 or the median rental cost exceeds $3,000, and for purposes of the pilot program, limits this definition to the City and County of San Francisco, the County of San Diego, the County of Santa Clara, or the County of Los Angeles.
3. Provides that eligible applicants may receive one-time down payment assistance, not to exceed 10% of the home sale price and not to exceed 20% of the median home cost for the high-cost county that the eligible applicant resides in; as specified.
4. Requires an applicant to submit an application to the CalHFA for down payment assistance in the form and manner prescribed by the CalHFA.
5. Creates the Teacher Housing Assistance Fund in the State Treasury and provides moneys be available subject to appropriation by the Legislature.
6. Requires CalHFA, by December 31, 2023, to submit a report to the Assembly and Senate Committees on Appropriations that evaluates the demand for the down payment assistance provided by the pilot program and the effectiveness of the program. Requires CalHFA to make a recommendation in the report as to whether or not the program should be continued.

FISCAL EFFECT:

1. Unknown, but likely significant costs to CAlFHA to create the pilot program. The program is contingent upon an unspecified appropriation, but would likely need to be at least $40 million to render the program meaningful. For example, if 50 loans were approved in each of the three counties and the city and county at the maximum of 20% of the median sale price in each county, the cost would approximately $35 million.
2. Additional costs to CalHFA for creating, administering, monitoring, and reporting on the pilot program. CalFHAs typical administration fee is 5% of the allocation, but they indicate that is likely to be inadequate for a program of this size and scope. For example, if the pilot program is allocated $40 million, a 5% administrative fee would be $2 million.

COMMENTS:

1. Purpose. According to the author, "California is facing a teacher shortage crisis. According to a recent study, 89% of districts in the cities and 69% of districts in suburban areas report a teacher shortage. Due to the high cost of living, school districts have had difficulty not only attracting, but retaining teachers. Californians greatly value our public education system, and housing security is vital to the success of our schools. The affordable housing crisis and teacher shortage are not mutually exclusive. In Santa Clara County the average teacher income is $80,000 - $90,000 but the income required to own a single-family home is over $170,000 a year. In the City and County of San Francisco, the average annual teacher income is approximately $67,000, but the income required to purchase a single-family home is over $200,000."
2. Background. The California Housing Finance Agency (CalHFA) is the state's affordable housing lender. Historically, CalHFA has funded its programs by issuing bonds and then repaying the bonds with loan proceeds. The agency provides down payment assistance through the MyHome Program to first-time low and moderate income homebuyers through a deferred payment, subordinate loan. Homebuyers receive between 3% and 6% of the down payment toward a home purchase that is secured against the home. The down payment assistance is paired with a CalHFA first loan mortgage and payment on the down payment assistance is due when the borrower pays off or refinances the first loan.

CalHFA offers down payment assistance statewide, including the four counties targeted in this bill. In high cost counties, the sales price of a home that can qualify for MyHOMe is capped at approximately $650,790. Existing CalHFA programs are also limited to first time homebuyers (defined as someone that has not owned a home in the last three years).

As of March 2017, the median sale price of existing single-family homes in the counties targeted in this bill is as follows:

San Diego County: $571,000

San Francisco City/County: $1,350,000

Santa Clara County: $1,130,000

Los Angeles County: $465,810

Using those numbers, the proposed 20 percent cap for down payment assistance based on median home price in these counties would be: $270,000 for San Francisco; $114,200 for San Diego; $226,000 for Santa Clara; and $93,162 for Los Angeles.

By comparison, CalHFA’s existing downpayment assistance programs -MyHome and Extra Credit Teacher Home Purchase Program (ECTP) offer a deferred payment junior loan of 3.5% (averages about $12,000 across the state) or up to $15,000 in a high cost county.

1. Related Legislation. AB 45 (Thurmond), requires CalHFA to administer the California School Employee Housing Assistance Program (Program), a predevelopment grant and loan program, to fund the creation of affordable housing for school district employees, including teachers. That bill is pending on this Committee's Suspense File.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 26, 2017

ASSEMBLY COMMITTEE ON EDUCATION

Patrick O'Donnell, Chair

ABPCA Bill Id:AB 1182 (

Author:Low) – As Amended Ver:April 20, 2017

[This bill was double-referred to the Assembly Committee on Housing and Community Development and was heard by that committee as it relates to issues under its jurisdiction.]

SUBJECT: Housing: Teacher Housing Assistance Pilot Program

SUMMARY: Establishes the Teacher Housing Assistance Pilot Program (pilot program) to be administered by the California Housing Finance Agency (CalHFA), subject to an appropriation for this purpose by the Legislature. Specifically, this bill:

1. Makes the following legislative findings and declarations:
2. The State of California is currently experiencing a shortage of qualified teachers;
3. A number of factors including the high cost of living affect a school district's ability to recruit the necessary number of teachers;
4. A high cost of living particularly affects recruitment in city and suburban districts;
5. According to a recent study, 89% of districts in cities and 69% of districts in suburban areas report experiencing a teacher shortage; and
6. San Francisco, San Diego, Santa Clara, and Los Angeles are among the counties with the highest cost of living in the state.
7. Declares the purpose of the pilot program is to assist new and experienced teachers, who are currently teaching or have committed to teach in a high-cost county to obtain housing within the county in which they are living or have committed to teach.
8. Defines an "eligible applicant" to mean a person who satisfies all of the following:
9. Holds a valid teaching credential;
10. Currently teaches or has committed to teach in a school district located in a high-cost county; and
11. Resides within the high-cost county in which the person is teaching or has committed to teach.
12. Defines "high-cost county" to mean a county where the median housing cost exceeds $500,000 or the median rental cost exceeds $3,000.
13. Provides that for purposes of the pilot program high cost county is limited to the City and County of San Francisco, the County of San Diego, the County of Santa Clara, or the County of Los Angeles.
14. Requires CalHFA to adopt regulations pursuant to the Administrative Procedures Act to implement the program.
15. Provides that eligible applicants may receive one-time down payment assistance subject to the following requirements:
16. The amount of the down payment assistance shall not exceed 10% of the home sale price and may not exceed 20% of the median home cost for the high-cost county that the eligible applicant resides in;
17. Down payment assistance shall be provided as a deferred-payment, low-interest, subordinate mortgage loan;
18. The amount of the down payment shall be due and payable at the end of the term or upon sale of or refinancing of the home; and
19. Requires as a condition of receiving down payment assistance, the applicant shall commit to teaching in the high-cost county that the applicant resides in for five years after the purchase of the house.
20. Requires an applicant to submit an application to the CalHFA for down payment assistance in the form and manner prescribed by the CalHFA including all of the following information:
21. The school that the applicant is teaching in or has committed to teach in is located in a high-cost county;
22. The type of financial assistance requested; and
23. Any other information that the agency determines is necessary to process the application.
24. Requires the agency to review any application to determine if the applicant is eligible for down payment assistance.
25. Requires CalHFA to give priority to eligible applicants holding a credential in the following high-need subject matter areas:
26. Bilingual education;
27. Science, technology, engineering, and mathematics; and
28. Special education.
29. Requires an eligible applicant who receives down payment assistance to submit, by January 1 of each year, a form to the agency that certifies that the applicant is employed at a school district that is located within the high-cost county in which the applicant committed to teach.
30. Creates the Teacher Housing Assistance Fund in the State Treasury and provides moneys shall be available for the program by appropriation of the legislature.
31. Requires on or before December 31, 2023, CalHFA must submit a report to the Assembly Committee on Appropriations and the Senate Committee on Appropriations that evaluates the demand for the down payment assistance provided by the pilot program and the effectiveness of the program in addressing the state's teacher shortage.
32. Requires CalHFA to make a recommendation in the report as to whether or not the program should be continued.

EXISTING LAW:

1. Provides that CalHFA is administered by a board of directors and is supervised on a day-to-day basis by an executive director. (Health & Safety Code 50901, 50908)
2. Provides that the primary purpose of CalHFA is to meet the housing needs of persons and families of low or moderate income. (Health & Safety Code 50950)
3. Authorizes CalHFA to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others. (Health & Safety Code 51050)

FISCAL EFFECT: Unknown

COMMENTS:

Purpose of this bill: According to the author, "California is facing a teacher shortage crisis. According to a recent study, 89% of districts in the cities and 69% of districts in suburban areas report a teacher shortage. Due to the high cost of living, school districts have had difficulty not only attracting, but retaining teachers. Californians greatly value our public education system, and housing security is vital to the success of our schools. The affordable housing crisis and teacher shortage are not mutually exclusive. In Santa Clara County the average teacher income is $80,000 - $90,000 but the income required to own a single-family home is over $170,000 a year. In the City and County of San Francisco, the average annual teacher income is approximately $67,000, but the income required to purchase a single-family home is over $200,000."

California Housing Finance Agency: The California Housing Finance Agency (CalHFA) is the state's affordable housing lender. Historically, CalHFA has funded its programs by issuing bonds and then repaying the bonds with loan proceeds. The agency provides down payment assistance through the MyHome Program to first-time low and moderate income homebuyers through a deferred payment, subordinate loan. Homebuyers receive between 3% and 6% of the down payment toward a home purchase that is secured against the home. The down payment assistance is paired with a CalHFA first loan mortgage and payment on the down payment assistance is due when the borrower pays off or refinances the first loan. Although CalHFA originally funded its down payment assistance program through bond funds, those funds have been exhausted and the agency is now using recycled funds to fund down payments. The agency has approximately $150 million remaining which it projects will last for another two years. CalHFA offers down payment assistance statewide, including the four counties targeted in this bill. In high cost counties, the sales price of a home that can qualify for MyHOMe is capped at approximately $650,790.

Income restrictions: To qualify for a down payment from MyHOME, homebuyers must have a qualifying income. In high cost areas, incomes are capped at 140% of the area median income and a homebuyer can receive up to $15,000 in assistance. AB 1182 does not place any income restrictions on a qualifying homebuyer or the homebuyer's household. Staff recommends that the bill be amended to apply the CalHFA income limits (140% of area median income) to the teacher assistance pilot program.

Potential "doubling up?" The pilot program would award mortgage assistance to qualifying individuals, but does not specifically address situations in which a household has two qualifying individuals, such as teachers who are married or are domestic partners. Although it is not the author's intent, both individuals would technically qualify for separate 10% grants. Accordingly, staff recommends an amendment to clarify that the maximum grant is 10% per loan.

Teachers who don't fulfill their commitment. This bill requires teachers who receive down payment assistance to annually verify to the agency that they are teaching in the district that they committed to. However, the bill does not provide an authority or mechanism for the agency to recover down payment assistance from recipients who do not fulfill their five-year commitment. The author's office has informed committee staff that they are looking in whether CalHFA has an existing process to recover loans that may be used for this purpose.

REGISTERED SUPPORT / OPPOSITION:

Support

San Diego County Office of Education

Santa Clara County Office of Education

San Francisco Unified School District

2 Individuals

Opposition

None

Analysis Prepared by: Rick Pratt / ED. / (916) 319-2087

Date of Hearing: April 19, 2017

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

ABPCA Bill Id:AB 1182 (

Author:Low) – As Amended Ver:April 5, 2017

SUBJECT: Housing: Teacher Housing Assistance Pilot Program

SUMMARY: Establishes the Teacher Housing Assistance Pilot Program (pilot program) to be administered by the California Housing Finance Agency (CalHFA). Specifically, this bill:

1. Makes the following legislative findings and declarations:
2. The State of California is currently experiencing a shortage of qualified teachers;
3. A number of factors including the high cost of living affect a school district's ability to recruit the necessary number of teachers;
4. A high cost of living particularly affects recruitment in city and suburban districts;
5. According to a recent study, 89% of districts in cities and 69% of districts in suburban areas report experiencing a teacher shortage; and
6. San Francisco, San Diego, Santa Clara, and Los Angeles are among the counties with the highest cost of living in the state.
7. Declares the purpose of the pilot program is to assist new and experienced teachers, who are currently teaching or have committed to teach in a high-cost county to obtain housing within the county in which they are living or have committed to teach.
8. Defines an "eligible applicant" to mean a person who satisfies all of the following:
9. Holds a valid teaching credential;
10. Currently teaches or has committed to teach in a school district located in a high-cost county; and
11. Resides within the high-cost county in which the person is teaching or has committed to teach.
12. Defines "high-cost county" to mean a county where the median housing cost exceeds $500,000 or the median rental cost exceeds $3,000.
13. Provides that for purposes of the pilot program high cost county is limited to the City and County of San Francisco, the County of San Diego, the County of Santa Clara, or the County of Los Angeles.
14. Requires CalHFA to adopt regulations pursuant to the Administrative Procedures Act to implement the program.
15. Provides that eligible applicants may receive one-time down payment assistance subject to the following requirements:
16. The amount of the down payment assistance shall not exceed 20% of the home sale price and may not exceed 20% of the median home cost for the high-cost county that the eligible applicant resides in; and
17. Requires as a condition of receiving downpayment assistance, the applicant shall commit to teaching in the high-cost county that the applicant resides in for five years after the purchase of the house.
18. Provides that an eligible applicant may receive an annual rental stipend subject to the following requirements:
19. The amount of the stipend shall be provided in a lump sum to applicant in an amount that is equal to one-half of the eligible applicant's annual rent but that amount shall not exceed $1,500 per month when divided by 12 months; and
20. Requires as a condition of receiving a rental stipend the eligible applicant shall commit to teaching in the high-cost county for each fiscal year in which the funds are received.
21. Requires an applicant to submit an application to the CalHFA for financial assistance in the form and manner prescribed by the CalHFA including all of the following information:
22. The school that the applicant is teaching in or has committed to teach in is located in a high-cost county;
23. The type of financial assistance requested; and
24. Any other information that the agency determines is necessary to process the application.
25. Requires the agency to review any application to determine if the applicant is eligible for funding.
26. Requires CalHFA to give priority to eligible applicants holding a credential in the following high-need subject matter areas:
27. Bilingual education;
28. Science, technology, engineering, and mathematics; and
29. Special education.
30. Creates the Teacher Housing Assistance Fund in the State Treasury and provides moneys shall be available for the program by appropriation of the legislature.
31. Requires on or before December 31, 2023, CalHFA must submit a report to the Assembly Committee on Appropriations and the Senate Committee on Appropriations that evaluates the demand for the financial assistance provided by the pilot program and the effectiveness of the program in addressing the state's teacher shortage.
32. Requires CalHFA to make a recommendation in the report as to whether or not the program should be continued.

EXISTING LAW:

1. Provides that CalHFA is administered by a board of directors and is supervised on a day-to-day basis by an executive director. (Health & Safety Code 50901, 50908)
2. Provides that the primary purpose of CalHFA is to meet the housing needs of persons and families of low or moderate income. (Health & Safety Code 50950)
3. Authorizes CalHFA to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others. (Health & Safety Code 51050)

FISCAL EFFECT: Unknown.

COMMENTS:

Purpose of this bill: The author states, "California is facing a teacher shortage crisis. According to a recent study, 89% of districts in the cities and 69% of districts in suburban areas report a teacher shortage. Due to the high cost of living, school districts have had difficulty not only attracting, but retaining teachers. Californians greatly value our public education system, and housing security is vital to the success of our schools. The affordable housing crisis and teacher shortage are not mutually exclusive. In Santa Clara County the average teacher income is $80,000 - $90,000 but the income required to own a single-family home is over $170,000 a year. In the City and County of San Francisco, the average annual teacher income is approximately $67,000, but the income required to purchase a single-family home is over $200,000."

California Housing Finance Agency: The California Housing Finance Agency (CalHFA) is the state's affordable housing lender. Historically, CalHFA has funded its programs by issuing bonds and then repaying the bonds with loan proceeds. The agency provides downpayment assistance through the MyHome Program to first-time low and moderate income homebuyers through a deferred payment, subordinate loan. Homebuyers receive between 3% and 6% of the downpayment toward a home purchase that is secured against the home. The downpayment assistance is paired with a CalHFA first loan mortgage and payment on the down payment assistance is due when the borrower pays off or refinances the first loan. Although CalHFA originally funded its downpayment assistance program through bond funds, those funds have been exhausted and the agency is now using recycled funds to fund downpayments. The agency has approximately $150 million remaining which it projects will last for another two years. CalHFA offers downpayment assistance statewide, including the four counties targeted in this bill. In high cost counties, the sales price of a home that can qualify for MyHOMe is capped at approximately $650,790.

Loan versus grant: As discussed above, the MyHOME program operates as a revolving loan fund allowing CalHFA to assistance multiple homeowners with limited funds. AB 1182 would provide grants up to 20% of the downpayment assistance to qualifying teachers in four counties – San Diego, Santa Clara, San Francisco and Los Angeles -- in which the median home price exceeds $500,000. In February of this year, according to the California Association of Realtors,the average home price in Santa Clara County was $1.1 million. The committee may wish to consider reducing the total downpayment a homeowner can received to 10% to better align the program more closely with CalHFA's existing program and require the down payment to be structured as a loan rather than a grant.

Income restrictions: To qualify for a downpayment from MyHOME, homebuyers must have a qualifying income. In high cost areas, incomes are capped at 140% of the area median income and a homebuyer can receive up to $15,000 in assistance. AB 1182 does not place any income restrictions on a qualifying homebuyer or the homebuyer's household. The committee may wish to consider requiring the household income of the qualifying teacher to be capped at 140% of area median income to target the funding more effectively.

Rental stipend: In addition to providing downpayment assistance to a teacher, AB 1182 would also allow for a rental stipend of up to $1500 a year (up to $18,000 per year). Unlike Section 8/HomeChoice Vouchers, in which the stipend is provided directly to the landlord to subsidize the rent, the payment would be provided to the teacher in a lump sum at the beginning of the school year to pay the rent. There is no state level rental assistance program currently in place at either the Department of Housing and Community Development or CalHFA.

Teacher Certification: As a requirement of receiving downpayment assistance, a teacher must commit to teaching in the school district for five years and to qualify for the rental stipend commit to teaching in the school district for the fiscal year in which the stipend is received. There are no parameters in the bill for how to qualify a teacher's commitment. The committee may wish to consider requiring the teacher to provide an annual proof of employment to CalHFA as a condition of receiving the funding.

Staff comments: The amendments below refine the bill including requiring the downpayment to be a loan rather than a grant which will allow any funding made available for the program to be reused by another qualifying teacher. It is unclear how the rental stipend portion of the bill would be administered since the payments would go directly to a qualifying teacher rather than their landlord – the committee amendments delete that portion of the bill.

Committee amendments:

1. Require the down payment assistance to be structured as a deferred payment, subordinate loan that must be repaid when the home is sold.
2. Cap the amount of downpayment at 10% of the home price.
3. Require the teacher to certify on an annual basis that they are employed with the school district.
4. Eliminate the rental stipend option within the bill.

Double referral: If AB 1182 passes out of this committee, the bill will be referred to the Committee on Education.

REGISTERED SUPPORT / OPPOSITION:

Support

Santa Clara County office of Education (sponsor)

Charles "Chappie" Jones, Councilmember, District 1, City of San Jose

City of San Jose

San Diego County Office of Education

San Francisco Unified Scholl District

Opposition

None on file

Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085