Housing programs: financing.

2025-2026 Regular Session Introduced by Jesse Gabriel

Allows HCD to unilaterally waive residual receipts or minimum loan payments to stabilize financially at-risk affordable housing developments.

From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 10. Noes 0.) (June 24). Re-referred to Com. on APPR.

#housingprograms #financing

Purpose and intent

AB 2626, introduced by Assembly Member Gabriel (Co-sponsor: Jesse Gabriel), seeks to support affordable housing developments that are financially at risk.

The bill adds a new provision to the Health and Safety Code to improve the fiscal integrity of developments financed with Department of Housing and Community Development (HCD) resources.

Key provisions and changes

New code section added: Health and Safety Code Section 50406.4.7.

Core authority granted to HCD: In its sole discretion, the department may waive payment of residual receipts or minimum annual loan payments required under a department regulatory agreement.

This waiver is intended to improve the fiscal integrity of a development financed with departmental resources.
The waiver provisions are not subject to other laws that would otherwise require residual receipts or minimum loan payments.

Legislative intent statement: The Legislature expresses its intent to enact legislation to assist affordable housing developments that are financially at risk.

Who/what is affected

Eligible housing developments that receive financial assistance from the California HCD (e.g., through deferred payment loans or other financing arrangements tied to regulatory agreements and security documents).

The department’s regulatory agreements and related financial contracts, insofar as they include residual receipts or minimum annual loan payments.

Procedural and timeline aspects

The bill was introduced on February 20, 2026.

It follows the standard legislative path in 2025–2026, with action history showing referrals to the Housing and Community Development Committee and amendments by the author.

The most notable procedural effect is enabling HCD to unilaterally waive certain loan-payment obligations under its regulatory agreements, at the department’s sole discretion.

If enacted, the waiver authority could affect the timing and amounts of cash flow to lenders/investors and potentially affect how projects meet regulatory compliance and financial performance metrics.

Fiscal impact (high-level)

The bill does not authorize new appropriations (no appropriation identified in the digest).

By allowing waivers of residual receipts or minimum annual payments, it could reduce guaranteed revenue streams for lenders or partners and improve the solvency or viability of at-risk developments.

The exact fiscal footprint would depend on how frequently waivers are exercised and the terms of individual regulatory agreements.

Overall assessment

AB 2626 provides a targeted tool for HCD to stabilize financially at-risk affordable housing developments by permitting discretionary waivers of certain contractual loan-payment requirements.

It emphasizes the Governor and Legislature’s interest in preserving affordable units that might otherwise face financial distress, potentially reducing displacement and preserving long-term affordability.

Stakeholders (developers, lenders, and investors) would want to monitor how and when the department exercises this waiver authority, as it could influence project financing structures and regulatory outcomes.

Bill