AB 1053: Housing programs: multifamily housing programs: expenditure of loan proceeds.

Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents.

Existing law, the Administrative Procedure Act, sets forth procedures a state agency is required to follow when adopting, amending, or repealing any regulation, including providing public notice and time for public comment, with exceptions for emergency regulations in the case of a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare.

This bill would authorize a borrower to use any funds approved, reserved, or allocated by the department following the effective date of specified guidelines and for purposes of providing a loan under specified multifamily housing programs, including the Multifamily Housing Program, or any additional multifamily housing lending program that the department elects, for construction financing, permanent financing, or a combination of construction financing and permanent financing, as provided. The bill would require the department, by July 1, 2026, to adopt guidelines as emergency regulations to, among other things, implement these provisions. The bill would also require the department, by January 1, 2027, to adopt guidelines, in accordance with the rulemaking provisions of the Administrative Procedure Act, to, among other things, implement these provisions. The bill would authorize the department to charge fees, including, but not limited to, application and monitoring fees, to cover the enhanced administrative costs under the bills provisions. The bill would specify that these provisions do not limit the eligible uses of funds otherwise authorized under any program administered by the department. The bill would specify that the implementation of its provisions are contingent upon appropriation by the Legislature of sufficient funds for specified purposes.