California Residential Mortgage Insurance Act.
If enacted, SB750 will modify existing state laws related to housing financing by allowing the California Housing Finance Agency to provide insurance for construction loans and credit enhancements for multifamily housing projects, thereby potentially increasing the availability of affordable housing. The bill also establishes the California Residential Mortgage Insurance Fund, which will be continuously appropriated for these purposes and will not be subject to typical state government oversight, streamlining the funding process for housing projects.
Senate Bill 750, introduced by Senator Cortese, aims to address California's housing crisis by establishing the California Residential Mortgage Insurance Act (Cal REMIA). This act is designed to create an insurance program for multifamily housing construction loans, intended to stimulate the flow of private capital into housing development. The bill proposes that the California Housing Finance Agency administer and implement this program starting January 1, 2027, contingent upon the approval of a related constitutional amendment by voters. The act is a response to an alarming shortfall in housing availability, especially for low-income populations.
Notable points of contention surrounding SB750 may arise from its financial and administrative implications. Critics could argue that the bill, while aiming to boost housing development, creates a scenario where the state is taking on significant financial risk by insuring these loans without sufficient oversight. There is also concern regarding the potential impact of the premium rates charged for the insurance, which can vary but must not exceed 2%. Additionally, questions about the effectiveness of this program in actually increasing housing availability and addressing the current shortfall will likely be raised during discussions.