CHAPTER 1. General Provisions and Definitions [51600. - 51603.]

Cal. Health and Safety Code - HSC 1.

in effect

Cal. Health and Safety Code - HSC § 51600. Section 51600.

The Legislature finds and declares as follows: (a) For reasons of prudent investment policy, California’s public and private lending institutions are not making mortgage financing available for certain single- and multifamily residential housing occupied or intended to be occupied by substantial numbers of persons and families of low and moderate income because of the perceived risks these loans entail. The absence of this financing has also caused and contributed to the deterioration of residential neighborhoods, has inhibited government in its attempts to arrest and reverse deterioration through local code enforcement programs, and has generally reduced or limited the supply of safe, decent, and sanitary housing available to persons and families of low and moderate income. (b) The absence of financing has resulted in persons and families who are not able to realize financial security through equity accumulation and psychological security through a sense of permanence and control over the direction of their lives, as well as a lack of job creation linked to housing construction or the sale of existing housing. (c) The percentage of California residents who own their own homes is considerably lower than the national average. (d) All of the factors set forth in subdivisions (a) to (c), inclusive, have hindered the state’s economy and the general well-being of the state’s populace. (e) The state has authorized state agencies, local agencies, redevelopment agencies, and housing authorities to provide financing for preservation and construction of residential structures, including single-family and multifamily residential housing, to enhance housing opportunities for persons and families of low or moderate income. However, some of these local public entities will be unable to sell bonds pursuant to that authorization on terms sufficiently favorable to enable them to make loans at less than the market-rate interest because of a lack of adequate bond security. (f) Although the agencies are empowered to sell bonds in order to raise funds for housing assistance, they may be unable to market these bonds on terms and at interest rates adequate to enable these agencies to accomplish their purposes. (g) For reasons of prudent investment policy, private lending institutions and public agencies are not making mortgage financing available for the rehabilitation of buildings identified by local jurisdictions as being potentially hazardous. (h) For reasons of prudent investment policy, private lending institutions and public agencies are not making mortgage financing available for residential housing for low- and moderate-income households in California due to an inadequate supply of reliable, consistent, and affordable mortgage guaranty insurance. (i) To provide credit enhancements for the development of new, or the purchase or refinancing of existing, low-income and moderate-income multifamily housing.

Cal. Health and Safety Code - HSC § 51601. Section 51601.

It is the intent of the Legislature in enacting this part to establish programs of bond and loan insurance for the following purposes: (a) To encourage homeownership opportunities for low- and moderate-income rental households and to encourage multifamily residential construction and rehabilitation, all of which will revitalize the state’s economy and provide security for these households. (b) To encourage and facilitate the preservation of existing housing and improve housing opportunities by reducing the risk factor for all of the following: (1) Loans to persons and families of low and moderate income for housing in older deteriorating areas and neighborhood preservation areas. (2) Bonds issued by governmental agencies for the purpose of providing housing for persons and families of low or moderate income. (3) Loans to provide housing for persons and families of low or moderate income. (4) Privately financed loans for multifamily residential housing that benefits low- and moderate-income households. (5) Construction loan loss guarantee assistance for rehabilitation of buildings in need of rehabilitation improvements, where the building has been identified by local jurisdictions as being potentially hazardous. (c) To encourage and facilitate housing opportunities for low-income and moderate-income households which might not readily be available in the private market due to, in part, location, type of housing, and income group serviced, provided, however, that the actuarial soundness of the insurance fund not be jeopardized. (d) To provide single-family and multifamily residential housing mortgage guaranty insurance. (e) To provide single-family and multifamily residential guaranty insurance for construction loans. (f) To provide credit enhancements for the development of new, or the purchase or refinancing of existing, low-income and moderate-income housing.

Cal. Health and Safety Code - HSC § 51601.5. Section 51601.5.

The Legislature finds and declares the following: The California Housing Finance Agency, in administering the mortgage guaranty insurance program, as it is currently constituted in law, will adopt a new five-year business plan pursuant to board resolution at the June 9, 1993, meeting of the agency’s board of directors. The business plan will contain all of the financial resources of the agency necessary for this insurance fund to create a mortgage guaranty insurance underwriting capacity for single-family loans at one billion two hundred million dollars ($1,200,000,000) of gross insurance. In order to initiate this program, the agency will provide its 1993 commitment of eighteen million dollars ($18,000,000) as soon as reasonably practicable following the adoption of the June 9, 1993, board resolution. The agency will also commit that it will provide its 1994 pledge of eleven million dollars ($11,000,000) at its January 1994 board of directors meeting. During the five-year time period, the program will result in a significant beneficial economic impact on the state’s economy, particularly on the homebuilding and real estate resale markets. As such, the agency will remain fully committed to implementing the plan, unless the economic and fiscal expectations of the agency fail to materialize so that implementation of the plan, in whole or in part, is no longer possible without jeopardizing the fiscal integrity or the bond rating of the agency.

Cal. Health and Safety Code - HSC § 51602. Section 51602.

(a) The agency shall require that occupancy of housing for which a loan is insured pursuant to this part shall be open to all regardless of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, and that contractors and subcontractors engaged in the construction or rehabilitation of housing funded by a loan insured pursuant to this part shall provide an equal opportunity for employment without discrimination as to any basis listed in subdivision (a) of Section 12940 of the Government Code, as those bases are defined in Sections 12926 and 12926.1 of the Government Code, and except as otherwise provided in Section 12940 of the Government Code. (b) Notwithstanding subdivision (a), with respect to familial status, subdivision (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in subdivision (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51, Section 4760, and Section 6714 of the Civil Code, and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to subdivision (a). (c) A qualified developer shall certify compliance with this section and Section 50955 according to requirements specified by the pertinent criteria of the agency.

Cal. Health and Safety Code - HSC § 51603. Section 51603.

(a) Unless the context otherwise requires, the definitions contained in this chapter shall govern the construction of this part. These definitions shall be in addition to definitions set forth in Part 1 (commencing with Section 50000) of this division, except that, where the same term is defined in this chapter and in that part, the definition of the term contained in this chapter shall prevail. (b) As used in this part: (1) “Approved lending institution” means a qualified mortgage lender approved by the agency for participation in a program of loan insurance, including those successors and assigns of any such institution as are permitted by the agency. “Approved lending institution” shall also include the agency. (1.5) “Board” or “board of directors” means the Board of Directors of the California Housing Finance Agency. (2) “Bond reserve requirement” means an amount specified by the agency which shall, as of any particular date of computation, be at least equal to the total of both of the following: (A) Insurance benefits due and payable as of the date under contracts of bond insurance. (B) The percentage, required by the rating agencies or required to adequately provide security for the bonds insured pursuant to this part, of the sum of the aggregate insurance outstanding under contracts of bond insurance and the aggregate amounts to be insured under the agency’s commitments to insure bonds. (2.5) “Credit enhancement” means a method of reducing risk for a lender through letters of credit and bond and loan insurance. (3) “Executive director” means the Executive Director of the California Housing Finance Agency. (4) “Fund” or “insurance fund” means the California Housing Loan Insurance Fund, which is hereby created. (5) “Insurance reserve requirement” means an amount established by the agency, which shall, as of any particular date of computation, be at least equal to the total of both of the following: (A) Insurance benefits due and payable as of that date pursuant to contracts of loan insurance. (B) An amount calculated to equal any required policyholder’s surplus which would be required of a mortgage guaranty insurer under Section 12640.05 of the Insurance Code. (6) “Insured loan” means a loan insured pursuant to Chapter 4 (commencing with Section 51650). (7) “Loan-to-value limitation” means a limitation on the ratio of the original principal balance of a loan to the appraised value at the time of execution of the contract of insurance, including the estimated costs of repair and rehabilitation and sale, if any, of the property securing it. (8) “Mortgage guaranty insurance” means either of the following: (A) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a first lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families. (B) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a junior lien or charge on real estate, provided the improvement on the real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families. (C) Insurance against financial loss by reason of nonpayment of principal, interest, and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust, or other instrument constituting a lien or charge on real estate, provided the improvement on the real estate is a building or buildings designed for occupancy by five or more families or designed to be occupied for industrial or commercial purposes. (9) “Multifamily residential housing” means an improvement on real estate which is a building or buildings containing five or more residential units. (10) “Persons and families of low or moderate income” means “persons and families of low or moderate income” as defined in Section 50093. (11) “Qualified developer” means a housing sponsor which is certified by the agency to be qualified according to experience, financial capability, and any other pertinent criteria as the fund may establish to carry out rehabilitation and new construction with loans insured pursuant to this part. (12) “Rehabilitated structure” means a residential structure which becomes eligible for an insured acquisition loan by rehabilitation conducted pursuant to rules of the agency, whether or not loan insurance is provided by the agency for that rehabilitation. (13) “Single-family residential housing” means an improvement on real estate which is a building or a condominium unit or buildings containing one to four units.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026