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SB-686 • 2026

Housing programs: financing.

Housing programs: financing.

Housing
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Reyes
Last action
2025-10-10
Official status
Chaptered by Secretary of State. Chapter 523, Statutes of 2025.
Effective date
Not listed

Plain English Breakdown

The official source material does not provide specific details about the maximum amount of additional debt allowed or consequences for misuse of funds.

Housing Programs: Financing

This law modifies the conditions under which property owners can take on additional debt for housing projects, specifying that such debt must be used for predevelopment costs, unreimbursed capital improvements, and operating deficits.

What This Bill Does

  • Allows property owners with agreements from the Department of Housing and Community Development to borrow more money if it is needed for specific housing improvements or costs.
  • Requires this borrowed money to be used only for reimbursement of borrower advances for predevelopment costs, unreimbursed capital improvements, and unreimbursed operating deficits.

Who It Names or Affects

  • Property owners who have agreements with the Department of Housing and Community Development.
  • The Department of Housing and Community Development, which administers housing programs.

Terms To Know

extracted equity
Debt added to a department-regulated property that is not used in prescribed ways.

Limits and Unknowns

  • The bill does not specify the maximum amount of additional debt allowed.
  • It is unclear what consequences there are if borrowed funds are misused.

Bill History

  1. 2025-10-10 California Legislative Information

    Chaptered by Secretary of State. Chapter 523, Statutes of 2025.

  2. 2025-10-10 California Legislative Information

    Approved by the Governor.

  3. 2025-09-22 California Legislative Information

    Enrolled and presented to the Governor at 2 p.m.

  4. 2025-09-11 California Legislative Information

    Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2927.) Ordered to engrossing and enrolling.

  5. 2025-09-09 California Legislative Information

    Ordered to special consent calendar.

  6. 2025-08-28 California Legislative Information

    In Senate. Concurrence in Assembly amendments pending.

  7. 2025-08-28 California Legislative Information

    Read third time. Passed. (Ayes 74. Noes 0. Page 2777.) Ordered to the Senate.

  8. 2025-08-21 California Legislative Information

    Read second time. Ordered to consent calendar.

  9. 2025-08-20 California Legislative Information

    From committee: Do pass. Ordered to consent calendar. (Ayes 15. Noes 0.) (August 20).

  10. 2025-08-20 California Legislative Information

    Coauthors revised.

  11. 2025-07-16 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 12. Noes 0.) (July 16). Re-referred to Com. on APPR.

  12. 2025-07-07 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on H. & C.D.

  13. 2025-06-05 California Legislative Information

    Referred to Com. on H. & C.D.

  14. 2025-05-29 California Legislative Information

    In Assembly. Read first time. Held at Desk.

  15. 2025-05-29 California Legislative Information

    Read third time. Passed. (Ayes 38. Noes 0. Page 1328.) Ordered to the Assembly.

  16. 2025-05-27 California Legislative Information

    Ordered to special consent calendar.

  17. 2025-05-23 California Legislative Information

    Read second time. Ordered to third reading.

  18. 2025-05-23 California Legislative Information

    From committee: Do pass. (Ayes 6. Noes 0. Page 1209.) (May 23).

  19. 2025-05-16 California Legislative Information

    Set for hearing May 23.

  20. 2025-04-21 California Legislative Information

    April 21 hearing: Placed on APPR. suspense file.

  21. 2025-04-04 California Legislative Information

    Set for hearing April 21.

  22. 2025-04-02 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 11. Noes 0. Page 609.) (April 1). Re-referred to Com. on APPR.

  23. 2025-03-13 California Legislative Information

    Set for hearing April 1.

  24. 2025-03-05 California Legislative Information

    Referred to Com. on HOUSING.

  25. 2025-02-24 California Legislative Information

    Read first time.

  26. 2025-02-24 California Legislative Information

    From printer. May be acted upon on or after March 24.

  27. 2025-02-21 California Legislative Information

    Introduced. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 686, Reyes.
Housing programs: financing.
Existing law, the Zenovich-Moscone-Chacon Housing and Home Finance Act, among other things, establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing and to provide housing assistance and home loans. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents.
Existing law requires the department, subject to certain conditions, to allow property owners subject to a regulatory agreement with the department to take out
additional debt on the development in order to finance, with the department’s approval, the rehabilitation of the property or investment in new affordable housing. Under existing law, one of those conditions is that any extracted equity is required to meet at least one of several conditions, as specified. Existing law defines “extracted equity” for these purposes to mean debt added to a department-regulated property that is not used in prescribed ways.
This bill would, additionally, require the department to allow property owners to take out additional debt, as described above, if any extracted equity is utilized for reimbursement of borrower advances for predevelopment costs, unreimbursed capital improvements, and unreimbursed operating deficits. The bill would revise the definition of “extracted equity” to mean debt distributed funds that are financed with
debt that is secured by a department-regulated property and is not used in prescribed ways.

Current Bill Text

Read the full stored bill text 
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