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CalHFA seeks $100 million disaster rebuilding fund to expand construction financing for wildfire survivors
Summary
CalHFA proposed a $100M Disaster Rebuilding Fund (56M GF, 44M settlement funds) to reduce construction lending risk through guarantees, interest-rate buydowns and subordinate loans to help wildfire-impacted homeowners rebuild.
The California Housing Finance Agency asked the Assembly subcommittee to approve a $100 million Disaster Rebuilding Fund intended to expand construction financing for homeowners whose properties were damaged or destroyed in qualified disasters.
Ellen Martin, director of homeownership at CalHFA, said the fund would combine a construction loan loss guarantee, an interest-rate buydown program and a revolving silent-second mortgage tool that would reduce lenders' risk and lower borrowers’ monthly costs. "The financing tools offered through the disaster rebuilding fund are designed to break through these barriers," Martin said.
CalHFA proposed using $56 million in general fund and $44 million from existing national mortgage settlement funds. The agency said the loan-loss guarantees and buydowns are expected to revolve quickly as projects complete, increasing the program’s impact over time.
LAO cautioned the legislature to consider alternatives and reinforced that the trailer-bill language leaves significant program design discretion to CalHFA; LAO also expressed concern about drawing from general-fund reserves and recommended offsetting reductions elsewhere if the legislature funds the proposal.
Local lenders and community development financial institutions testified in favor; Lynn Von Koch Liebert of Lendistry, a minority-led CDFI, said targeted financial innovation of this sort would attract private capital and close financing gaps for underserved homeowners.
Committee members pressed for additional program details including borrower eligibility, oversight and how the legislature would be notified about lender selection and program terms; CalHFA said eligibility would target homeowners in qualified disaster areas and that HFA would provide technical detail in subsequent materials.
