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SB 750

Financial institutions: payday lending; citations to the motor vehicle sales finance act in the deferred presentment service transactions act; revise. Amends sec. 2 of 2005 PA 244 (MCL 487.2122). TIE BAR WITH: SB 0739'25

2025-2026 Regular Session Introduced by Rosemary Bayer and 2 co-sponsors

Creates a state program to insure and credit-enhance affordable multifamily loans, leveraging private capital to accelerate production of low/moderate‑income housing.

PLACED ON ORDER OF THIRD READING
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Bill Summary · SB 750

SB 750 — "Restore the American Dream." (California Housing Finance and Credit Act)

Status: Passed 1st Reading (Introduced Feb 21, 2025)
Sponsor (as amended): Senator Cortese

Purpose / Intent

SB 750 would establish the California Housing Finance and Credit Act (CAHFCA) to stimulate production of affordable multifamily housing by leveraging private capital. The measure intends to provide, “without cost to the state,” credit enhancements and insurance for construction and permanent loans to reduce lender risk and accelerate development of lower‑ and moderate‑income housing.

The bill cites acute shortfalls in housing permits from the fifth housing element cycle (e.g., only 20% of needed very‑low‑income units permitted — 277,523 needed vs. 57,392 permitted) and a $7 billion funding gap for Bay Area predevelopment projects.

Key Provisions

  • Creates the California Housing Finance and Credit Program, administered by the California Housing Finance Agency (the “agency”).
  • Authorizes the agency to:
    • Insure construction loans and permanent loans for affordable multifamily housing.
    • Provide other credit enhancements (insurance, guarantees, securitization supports, bond enhancements, etc.).
    • Exercise specified powers/duties in the event of defaults on insured loans.
  • Establishes the California Housing Finance and Credit Fund (in the State Treasury):
    • Moneys in the Fund are continuously appropriated to the agency to provide credit enhancements and defray administrative costs.
    • Agency to charge a premium for loan insurance; premiums must be deposited into the Fund.
    • Premium rates may vary as specified but are capped at 2%.
  • Reporting and oversight:
    • Agency to produce an annual report and obtain an annual agreed‑upon procedures engagement.
    • Legislative Analyst’s Office (LAO) to prepare a biannual report evaluating program effectiveness.
  • Fiscal/structural declarations:
    • The Act states it is not subject to the State General Obligation Bond Law.
    • Provisions are severable.
  • Effective date: Commences January 1, 2027 — but only if a companion Senate constitutional amendment (to be approved by voters) is enacted.

Who would be affected

  • Primary beneficiaries: developers and sponsors of affordable multifamily housing and lenders providing construction and permanent financing.
  • Secondary impacts: low‑ and moderate‑income households (through increased housing production); the California Housing Finance Agency (new program responsibilities); private lenders (reduced loan risk); state budget offices (require inclusion of program authorization limits in the Governor’s budget).
  • Taxpayers: bill is structured to be self‑supporting via premiums and Fund, but the Digest flags “Appropriation: YES” and a 2/3 vote requirement.

Fiscal and Procedural Notes

  • Digest indicates fiscal committee review and requires a 2/3 legislative vote for enactment (and additional appropriations processes).
  • Governor must include in the budget a limit on the agency’s insurance authorization for the budget year.
  • Program activation is conditional on voter approval of a related constitutional amendment; absent that approval, the statute would not take effect.

Potential Impact & Risks

  • Potential benefits: could mobilize substantial private capital, reduce pipeline backlog, accelerate construction of affordable units, and leverage limited public subsidy.
  • Risks/uncertainties: program effectiveness depends on premium pricing, risk management, default experience, and the LAO evaluation; contingent on voter approval of a constitutional amendment; although intended “without cost to the state,” actual fiscal exposure depends on Fund performance and any state actions in defaults or extraordinary circumstances.

Compiled from official sources — confirm details with the bill’s official record.

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