CAPITOL WATCH: HCD Funding Uncertain

UPDATED: May 8, 2009
HCD Funding Uncertain

(from Housing CA.) PMIB UPDATE: HCD FUNDED THROUGH JUNE OR NOVEMBER (MAYBE)

On April 30, 2009, the California Department of Housing and Community Development (HCD) issued a memo outlining how it will spend approximately $539.5 million allocated to the department by the California Department of Finance out of the April bond sales.

In a reversal of prior pronouncements, both taxable and tax-exempt proceeds will be used to fund Proposition 46 (2002) and 1C (2006):
• $332.3 million for Proposition 1C ($209 million taxable, $123.3 million tax-exempt)
• $207.2 million for Proposition 46 ($162.2 million taxable, $44.3 million tax exempt)

Although the HCD memo includes lists of developments awarded Prop. 46 and 1C funds, it states the lists are not in order of priority. Instead, "expenditures will be made as projects meet their disbursement conditions, based on availability of funds at the time."

According to previous HCD estimates, $539 million is roughly half the amount the department needs to cover its commitments through June 2010. Added to the March infusion of $182 million from the Pooled Money Investment Account, it should allow the department to pay any draws submitted through November 2009.

In a continuing quest to get answers to these, and other, questions, the PMIB Coalition will meet with HCD and, possibly, the state treasurer's office soon. Additionally, legislators may call a meeting in an attempt to secure definitive answers that will lift the cloud of confusion and allow job-creating, revenue-generating home construction to proceed unhindered.

For information on your specific development(s), contact your HCD loan officer, Chris Westlake, or Lynn Jacobs at 916.445.4775.

Contact: Julie Snyder, 916.447.0503 x102 or jsnyder@housingca.org