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MAJOR HOUSING LEGISLATION OVERWHELMINGLY PASSES CALIFORNIA ASSEMBLY; THOUSANDS OF CALIFORNIANS ONE STEP CLOSER TO HOME OWNERSHIP

 SACRAMENTO, Calif., May 27 /PRNewswire/ -- Legislation designed to help thousands of families buy their first homes in California's more expensive urban areas passed the state Assembly today by an overwhelming vote.
 The legislation, AB 214 and AB 215, was introduced earlier this year by Assembly Speaker Willie L. Brown Jr. and is sponsored by the California Association of REALTORS (C.A.R.).
 AB 214 and AB 215 will establish a state-sponsored mortgage insurance fund called the California Housing Loan Insurance Fund (CaHLIF) to provide mortgage insurance to buyers who use less than 20 percent of a home's purchase price as a downpayment.
 Gov. Pete Wilson has made rapid implementation of Brown's legislation a priority because it will help about 55,000 California families purchase their first homes with low downpayments and, as a result, help improve the state's economy through the creation of an estimated 37,000 jobs.
 "Today, thousands of California families are one step closer to buying their first homes because of the Assembly's passage of AB 214 and AB 215," Brown said.
 "During the last several weeks, I have worked toward refining these bills and building bipartisan support for them. I cannot emphasize enough the benefit this legislation will have on California's economy," Brown added.
 California Association of REALTORS officials have been working closely with Speaker Brown for more than a year to create a program to help tackle California's housing affordability crisis by providing vital assistance to first-time homebuyers in the state's urban areas.
 "We applaud Speaker Brown, Gov. Wilson and the Assembly for working together on these critical housing bills, which will help tens of thousands of Californians," said C.A.R. President Walt McDonald. "In addition to jobs linked directly to housing, every home sale triggers a ripple effect in many areas of the economy -- sparking everything from furniture and appliance sales to business for moving companies," said McDonald, a Riverside REALTOR.
 AB 214 will allow thousands of California families to purchase their first homes with downpayments as low as 3 percent of the purchase price by creating a state-sponsored mortgage insurance fund.
 Currently, many homebuyers are unable to use the Federal Housing Administration (FHA) program because California's urban home prices typically require mortgages that exceed the FHA maximum loan amount of $151,725.
 AB 215 will ask California voters to reauthorize $185 million in general obligation bonds originally approved in 1982 to assist first- time homebuyers. Proposition 5 authorized $200 million of bond funding in 1982 to assist first-time homebuyers, but only $15 million was used.
 In general, $15 of loans can be extended for every $1 in the insurance fund. Therefore, $2.8 billion of mortgage financing will be available under the reauthorized Proposition 5 funding.
 Under provisions of AB 214 and AB 215, a family in the San Francisco Bay Area could purchase a home costing as much as $237,337, with a downpayment of $7,120, according to C.A.R. estimates. The maximum loan amount under CaHLIF in this example would be $230,217 -- or $78,492 higher than the maximum FHA loan amount of $151,725 allowed in San Francisco.
 In Orange County, a family could purchase a home costing as much as $213,230 with a downpayment of $6,397. The maximum CaHLIF loan amount for this example would be $206,833, or $55,108 higher than the maximum FHA loan amount.
 Additional examples for several other California regions are contained in the following chart.
 AB 214 and AB 215 will now be considered in the state Senate. Upon the governor's signature, AB 214 will immediately become law, and AB 215 will qualify for the June 1994 ballot.
 The California Mortgage Bankers Association, California Building Industry Association and the California League of Savings Institutions are among the organizations supporting AB 214 and AB 215.
 The California Association of REALTORS is a statewide trade association with 115,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.


EXAMPLES OF HOW THE CALIFORNIA HOUSING LOAN INSURANCE FUND (CaHLIF)
 PROGRAM WOULD APPLY TO SEVERAL MAJOR CALIFORNIA REGIONS
 Maximum Maximum Home Minimum Maximum
 Qualifying Purchase Price Down-Payment Home Loan
 Region Income Amount
 Los Angeles
 County $58,900 $199,988 $6,000 $193,988
 Orange County $62,800 $213,230 $6,397 $206,833
 San Diego
 County $51,900 $176,221 $5,287 $170,934
 San Francisco
 Bay Area $69,900 $237,337 $7,120 $230,217
 San Jose Area $68,400 $232,244 $6,967 $225,277
 Ventura County $61,100 $207,458 $6,224 $201,234
 NOTE: These examples assume a 3 percent downpayment on the purchase price, a 30-year fixed-rate mortgage at an interest rate of 8 percent and that 29 percent of a household's monthly gross income will be used for principal and interest payments. All of these figures are based on an analysis of how the CaHLIF program is envisioned to function, given proposed legislation.
 SOURCE: California Association of REALTORS.
 -0- 5/27/93
 /CONTACT: Lotus Lou or Jeff Hershberger of California Association of REALTORS, 213-739-8304/


CO: California Association of REALTORS ST: California IN: FIN SU: LEG

BP-LS -- LA030 -- 3067 05/27/93 15:29 EDT
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