Proposal to Unlock Billions in Private Capital for Affordable Housing One Step Closer as Senator Cortese’s…
SACRAMENTO, CA — California State Senator Dave Cortese’s Senate Bill 750 (SB 750), the California Housing Finance and Credit Act (CAHFCA), has cleared the California Legislature and now advances to the Governor’s desk, where it awaits his signature.
SB 750 takes a critical look at one of the biggest barriers to building affordable housing in California: access to affordable financing. The legislation directs the California Housing Finance Agency (CalHFA) to study how credit enhancements could help attract private capital and reduce financing costs for affordable housing production.
With interest rates and construction costs continuing to challenge housing development, projects that have already received approvals and public support can remain stalled because developers cannot secure financing on terms that make construction financially feasible.
Credit enhancements are a proven tool used by both the private and public sectors to reduce risk and encourage investment in projects that provide a public benefit. Credit enhancements are tools that make a loan or investment less risky for the lender, which can help an affordable housing developer borrower get financing at a lower interest rate or on better terms.
“We have a massive housing pipeline, but too many projects are stuck because the financing simply doesn’t pencil out. Nearly 600,000 low-income and moderate-income homes are stalled because of the lack of affordable financing,” said Senator Cortese. “We need to think bigger and smarter about how the state can help reduce financing risk without taking on unnecessary exposure for taxpayers. This study will help us determine whether setting aside funds to protect against potential defaults can unlock private investment and help turn stalled projects into homes.”
SB 750 would require CalHFA to assess potential credit enhancement strategies, including the costs, risks and benefits of establishing financial reserves that could be used to cover losses in the event of a default. The assessment would help determine whether such a structure could improve access to private financing and reduce borrowing costs for affordable housing projects.
Senator Dave Cortese represents Senate District 15, which encompasses San Jose and much of Santa Clara County in the heart of Silicon Valley. Visit Senator Cortese’s website: https://sd15.senate.ca.gov
Contact:
Mario B. Lopez, Communications Director
Office of Senator Dave Cortese | District 15
Phone: 408-545-8205 | Email: Mario.lopez@sen.ca.gov
For Scheduling Interviews
Natasha Waxman, Executive Assistant
Office of Senator Dave Cortese | District 15
Email: natasha.waxman@sen.ca.gov
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