Bill > SB686

This bill amends the Zenovich-Moscone-Chacon Housing and Home Finance Act to modify regulations regarding additional debt for properties under the Department of Housing and Community Development's regulatory agreements. Specifically, the bill requires the department to allow property owners to take out additional debt for property rehabilitation or new affordable housing investments, with several key conditions. These conditions include maintaining a minimum debt-service coverage ratio of 1.15, ensuring positive cash flow for 15 years, and keeping the department's lien subordinate only in certain circumstances. The bill expands the definition of "extracted equity" to include reimbursement of borrower advances for predevelopment costs, unreimbursed capital improvements, and unreimbursed operating deficits. The legislation also clarifies that extracted equity can be used for various purposes such as contributing to other affordable housing projects, purchasing limited partner interests, paying deferred developer fees, funding repairs, establishing project reserves, and other department-approved uses. Throughout these changes, the department's regulatory agreement remains in place, and the department continues to receive monitoring fees to ensure compliance with existing agreements.

Budget and Finance, Housing and Urban Affairs

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB686