SB417 - The Veterans and Affordable Housing Bond Act of 2026.

Senate Bill No. 417 CHAPTER 16 An act to add Part 16.1 (commencing with Section 54050) to Division 31 of the Health and Safety Code, and to add Article 5ab (commencing with Section 998.750) to Chapter 6 of Division 4 of the Military and Veterans Code, relating to housing, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately. [ Approved by Governor June 25, 2026. Filed with Secretary of State June 25, 2026. ] LEGISLATIVE COUNSEL'S DIGEST SB 417, Limón. The Veterans and Affordable Housing Bond Act of 2026. Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, home ownership for very low and low-income households, and downpayment assistance for first-time home buyers. Existing law also authorizes the issuance of bonds in specified amounts pursuant to the State General Obligation Bond Law and requires that proceeds from the sale of these bonds be used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, and housing-related parks. Existing law, the Veterans and Affordable Housing Bond Act of 2018, authorized, the issuance of bonds in the amount of $4,000,000,000 to finance various existing housing programs, as well as infill infrastructure financing and affordable housing matching grant programs, as well as financing for a specified program for farm, home, and mobilehome purchase assistance for veterans, pursuant to the State General Obligation Bond Law. This bill would enact the Veterans and Affordable Housing Bond Act of 2026, which, if adopted, would authorize the issuance of bonds in the amount of $11,250,000,000, pursuant to the State General Obligation Bond Law. Of the proceeds from the sale of these bonds, $10,000,000,000 would be used to finance programs to fund affordable rental housing and home ownership programs, including, among others, the Multifamily Housing Program, the CalHome Program, and the Joe Serna, Jr. Farmworker Housing Grant Program, and $1,250,000,000 would be used to provide additional funding for the above-described program for farm, home, and mobilehome purchase assistance for veterans, as provided. This bill would provide for submission of the bond act to the voters at the November 3, 2026, statewide general election, in accordance with specified law. This bill would declare that it is to take effect immediately as an urgency statute. Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Veterans and Affordable Housing Bond Act of 2026. SEC. 2. Part 16.1 (commencing with Section 54050) is added to Division 31 of the Health and Safety Code, to read: PART 16.1. Veterans and Affordable Housing Bond Act of 2026 CHAPTER 1. General Provisions 54050. Together with Article 5ab (commencing with Section 998.750) of Chapter 6 of Division 4 of the Military and Veterans Code, this part shall be known, and may be cited, as the Veterans and Affordable Housing Bond Act of 2026. 54051. This part shall only become operative upon adoption by the voters at the November 3, 2026, statewide general election. 54052. For purposes of this part, “fund” means the Affordable Housing Bond Act Trust Fund of 2026 created pursuant to Section 54054. CHAPTER 2. Affordable Housing Bond Act Trust Fund of 2026 and Program 54054. (a) The Affordable Housing Bond Act Trust Fund of 2026 is hereby created within the State Treasury. It is the intent of the Legislature that the proceeds of bonds issued and sold pursuant to this part, exclusive of refunding bonds issued pursuant to Section 54076, be deposited into the fund and used to fund affordable rental housing and home ownership programs as described in this chapter. (b) The proceeds of bonds issued and sold pursuant to this part for the purposes specified in this chapter shall be allocated in the following manner: (1) Five billion one hundred million dollars ($5,100,000,000) to be deposited into the Housing Rehabilitation Loan Fund established pursuant to Section 50661 to be used for the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. At least 10 percent of assisted units in each development receiving these funds shall be affordable to extremely low income households. (2) One billion one hundred fifty million dollars ($1,150,000,000) to be deposited into the Housing Rehabilitation Loan Fund established pursuant to Section 50661 to be used for supportive housing, as described in Section 50675.14, pursuant to the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. The administering entity shall offer capitalized operating subsidy reserves for supportive housing units in developments receiving these funds. (A) (i) Up to 15 percent of this amount shall be made available as grants to eligible entities specified in Section 50675.1.3 to acquire capital assets for the acquisition, conversion, or rehabilitation of interim housing to permanent housing, including scattered site projects for persons who are homeless, chronically homeless, or are at risk of homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations, the purchase of affordability covenants and restrictions for units, relocation costs for individuals who are being displaced as a result of rehabilitation of existing units, and capitalized operating subsidies for units purchased, converted, or altered with funds provided by this section. (ii) Any program or project that uses funds received for any of the purposes described in this subparagraph shall be subject to the regulatory streamlining provisions of Section 50675.1.5 of the Health and Safety Code and subdivision (i) of Section 50675.1.3. (iii) Any conflict between the other requirements of the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2) and this paragraph shall be resolved in favor of this paragraph, as may be set forth in the guidelines authorized pursuant to Section 54077. (B) (i) One hundred fifty million dollars ($150,000,000) of this sum shall be used for youth housing. (ii) For purposes of this subdivision, “youth housing” means housing for current or former foster youth, homeless minors or youth, or youth at risk of homelessness, including, but not limited to, housing that assists them develop the skills and resources they need to make a successful transition to independent, self-sufficient adulthood. (iii) Funds made available under this subparagraph shall be used only for the capital costs of developing, acquiring, rehabilitating, or preserving youth housing, and shall not be used to fund the operation or delivery of services. (iv) Any funds not encumbered for the purpose of this subparagraph within three years of availability shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (3) Seven hundred fifty million dollars ($750,000,000) to be appropriated by the Legislature, to the program commonly known as the Portfolio Reinvestment Program established pursuant to Chapter 5.5 (commencing with Section 50606) of Part 2. Any funds not encumbered for the purposes of this paragraph by November 3, 2036, shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (4) Two hundred million dollars ($200,000,000) to be appropriated by the Legislature, to a program to fund the acquisition and rehabilitation of unrestricted housing units and attach long-term affordability restrictions on the housing units, while safeguarding against the displacement of current residents. Any funds not allocated by the administering entity within the first three years shall be made available by the administering entity for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2). (5) Six hundred million dollars ($600,000,000) to be deposited into the Self-Help Housing Fund established pursuant to Section 50697.1. The moneys in the fund shall be available for the CalHome Program authorized by Chapter 6 (commencing with Section 50650) of Part 2, to provide direct, forgivable loans to assist development projects involving multiple home ownership units, including single-family subdivision, for self-help mortgage assistance programs, and for manufactured homes. These funds may also be expended for any authorized purpose of the program. Any funds not encumbered for the purposes of this paragraph by November 3, 2036, shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (6) Five hundred million dollars ($500,000,000) to be deposited into the Home Purchase Assistance Fund established pursuant to Section 51342. Notwithstanding Section 13340 of the Government Code and Section 50697.1, these funds are hereby continuously appropriated to the California Housing Finance Agency without regard to fiscal years, for purposes of the home purchase assistance program established pursuant to Chapter 6.8 (commencing with Section 51341) of Part 3. (7) Four hundred fifty million dollars ($450,000,000) to be deposited into the Joe Serna, Jr. Farmworker Housing Grant Fund, established pursuant to Section 50517.5, to fund grants or loans, or both, for the construction or rehabilitation of housing for agricultural employees and their families or for the acquisition of manufactured housing as part of a program to address and remedy the impact of current and potential displacement of farmworker families from existing labor camps, mobilehome parks, or other housing. These funds may also be expended for any authorized purpose of the program. These funds may also be used to provide technical assistance pursuant to Section 54007. Any funds not encumbered for the purposes of this paragraph by November 3, 2036, shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (8) Two hundred million dollars($200,000,000) to be appropriated by the Legislature, to the Tribal Housing Grant Program established pursuant to Chapter 6.4 (commencing with Section 50651) to finance housing and housing-related activities that will enable tribes to rebuild and reconstitute their communities. Any funds not encumbered for the purposes of this paragraph by November 3, 2036, shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (9) Five hundred million dollars ($500,000,000) for the Infill Infrastructure Grant Program of 2019 established pursuant to Section 53559 of the Health and Safety Code for infill incentive grants to assist in the new construction and rehabilitation of infrastructure that supports high-density affordable and mixed-income housing in locations designated as infill. Any funds not encumbered for the purposes of this paragraph by November 3, 2036, shall revert for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2. (10) Three hundred fifty million dollars ($350,000,000) to be appropriated by the Legislature for new affordable student housing projects. This funding shall be split evenly among the University of California and the California State University. Funded student housing projects shall meet the terms specified in subdivision (f) of Section 17201 of the Education Code. For these projects, the University of California and California State University shall meet the accountability and reporting requirements specified in subdivisions (i) and (o) of Section 17201 of the Education Code. (11) Two hundred million dollars ($200,000,000) to be deposited in the Affordable Housing Innovation Fund established pursuant to subparagraph (F) of paragraph (1) of subdivision (a) of Section 53545. Moneys in the fund shall be available, upon appropriation by the Legislature, pursuant to the Local Housing Trust Fund Matching Grant Program established pursuant to Section 50842.2 to fund competitive grants or loans to local housing trust funds that develop, own, lend, or invest in affordable housing and be used to create pilot programs to demonstrate innovative, cost-saving approaches to creating or preserving affordable housing. Local housing trust funds shall be derived on an ongoing basis from private contribution or governmental sources that are not otherwise restricted in use for housing programs. These funds may also be expended for any authorized purpose of this program. Any funds not encumbered for the purposes of this paragraph within three years of availability shall be reverted for general use in the Multifamily Housing Program authorized by Chapter 6.7 (commencing with Section 50675) of Part 2, unless the Department of Housing and Community Development determines that the funds should revert sooner due to diminished demand. (12) Notwithstanding paragraphs (1) to (11), inclusive, the Business, Consumer Services and Housing Agency or its successor and its administering departments may, upon appropriation by the Legislature, align or streamline the programs funded pursuant to this subdivision to improve efficiency and accelerate the deployment of funds, provided that expenditures remain consistent with the purposes and eligible uses approved by the voters and the Legislature. 54056. (a) The Legislature may, from time to time, amend any law related to programs to which funds are, or have been, allocated pursuant to this chapter for the purposes of improving the efficiency and effectiveness of those programs or to further the goals of those programs. (b) The Legislature may amend this chapter in order to reallocate the proceeds of bonds issued and sold pursuant to this part among the programs to which funds are to be allocated pursuant to this chapter as necessary to effectively promote the development of affordable housing in this state. (c) The Department of Housing and Community Development or administering entity may disburse any funds made available to housing development projects pursuant to this chapter during the construction period. CHAPTER 3. Fiscal Provisions 54060. Bonds in the total amount of ten billion dollars ($10,000,000,000), exclusive of refunding bonds issued pursuant to Section 54076, or so much thereof as is necessary as determined by the committee, are hereby authorized to be issued and sold for carrying out the purposes expressed in this part and to reimburse the General Obligation [Text truncated for display. Full text available on Congress.gov.]