(a) The agency shall administer a home purchase assistance program in accordance with this chapter. The purpose of the home purchase assistance program is to assist low- and moderate-income homebuyers to qualify for the purchase of owner-occupied homes. The agency shall make assistance to first-time homebuyers a priority use of these funds.

(b) Homeownership assistance under this chapter may be provided for any purposes authorized under Section 51402, including, but not limited to, all of the following:

Terms Used In California Health and Safety Code 51343

  • department: means State Department of Health Services. See California Health and Safety Code 20
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Fund: as used in this chapter , means the Home Purchase Assistance Fund. See California Health and Safety Code 51342
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC

(1) An interest rate subsidy to reduce the interest rate.

(2) A deferred-payment, low-interest, subordinate mortgage loan, including downpayment assistance, closing cost assistance, or both, to make financing affordable to low- and moderate-income homebuyers.

(3) Buying down the cost of mortgage insurance.

(c) The amount of home purchase assistance shall be available only in conjunction with first mortgage loan financing provided by the agency or the Department of Veterans Affairs.

(d) The term of the home purchase assistance shall not exceed the term of the primary loan.

(e) Assistance under this chapter is available only for owner-occupied residential structures.

(f) (1) The agency may, in its discretion, permit the lien of the downpayment assistance loan to be subordinated to refinancing if it determines that one of the following applies:

(A) The borrower has demonstrated hardship and subordination is required to avoid foreclosure.

(B) The borrower has acquired subordinate financing to build an accessory dwelling on the property.

(C) The borrower has acquired subordinate financing to make the property compliant with the federal Americans with Disabilities Act of 1990 (Public Law 101-336), facilitate rehabilitation needed to allow the owner to age in place, or both.

(D) The new loan meets the agency’s underwriting requirements.

(2) The agency may permit subordination on those terms and conditions as it determines are reasonable.

(3) The amount of home purchase assistance shall not be due and payable upon the sale of the home if the first mortgage loan is insured by the Federal Housing Administration (FHA) or if the first mortgage loan is, or has been, transferred to the FHA, or if the requirement is otherwise contrary to the regulations of the United States Department of Housing and Urban Development governing FHA insured first mortgage loans.

(g) All repayments shall be deposited in the fund for ongoing use in this downpayment assistance program.

(Added by renumbering Section 51345 by Stats. 2016, Ch. 32, Sec. 77. (SB 837) Effective June 27, 2016.)

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