Assembly Bill 1699 (AB 1699) was enacted in 2012. It authorizes the Department of Housing and Community Development (HCD) to restructure existing loans in specified HCD loan programs listed below. HCD adopted guidelines for implementing the requirements and named the program the Loan Portfolio Restructuring (LPR) Program.
The restructuring of HCD’s loans is intended to preserve affordable housing units that would have been lost to termination of the regulatory provisions restricting rents and occupancy, to address physical deterioration of the property, and/or to improve project fiscal integrity. (Sections 50560, 50561 and 50562, Chapter 3.9 of Part 2 of Division 31 of the Health and Safety Code)
Restructuring means one or more of the following:
- Extension of the original HCD loan term (or terms, if there are multiple HCD loans),
- subordination of the HCD loan or loans to a new senior loan, and/or
- tax credit investment in the project.
AB 1699 HCD Loan Restructuring Program