AB 2020 California Assembly · 2025-2026 Regular Session

Housing programs: financing.

Summary

Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, as specified, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. 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. This bill would permit the department to, subject to prescribed requirements, authorize the transfer of the department residual receipts share or excess reserves, as defined, from one rental housing development to another rental housing development with the same owner, as specified.

Issues: ✓ Housing

Bill status passed both 4 of 5 stages cleared

Introduction

Feb 2026

Committee Review

Aug 2026

Assembly Passage

May 2026

Senate Passage

Aug 2026

Governor

Introduced Feb 17, 2026 Last action Aug 30, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

08/13/26 - Amended Senate → 08/21/26 - Amended Senate · 5 edits · Aug 21, 2026

MODERATE

The August 21 amendment narrows what can be transferred between rental housing developments by removing 'excess operating income' as a transferable item, clarifies that transfers are made 'as equity,' and significantly tightens the definition of 'excess reserves' by tying replacement reserve transfers to a recent Physical Needs Assessment. A new floor of $1,000 per unit is added for replacement reserves, and the debt service reference is narrowed to 'senior mandatory debt service.'

Scope change

The bill's scope was narrowed in two ways: 'excess operating income' was removed as a transferable category, and the definition of transferable replacement reserves was tightened to require a recent third-party Physical Needs Assessment and a $1,000-per-unit floor.

SCOPE

Removed 'excess operating income' as a transferable item. Only 'department residual receipts share' and 'excess reserves' can now be transferred between developments.

REQUIREMENT

Added the phrase 'as equity' to clarify that transfers of residual receipts share or excess reserves are made as equity in the receiving development.

Added a new restriction: replacement reserves may not be transferred if doing so would reduce the balance below $1,000 per unit or if the project has not met (or is not projected to meet) minimum annual replacement reserve deposit requirements.

DEFINITION

Changed 'senior debt service' to 'senior mandatory debt service' in the definition of department residual receipts share, narrowing the calculation to only mandatory (not optional) payments.

Redefined 'excess reserves' for replacement reserves: now means only the amount in excess of what is needed to fund immediate and short-term capital repair needs as identified in a Physical Needs Assessment conducted within the preceding three years by a qualified independent third party. Also changed 'transition reserves' to 'project-specific transition reserves.'

02/17/26 - Introduced → 08/13/26 - Amended Senate · 5 edits · Aug 13, 2026

MODERATE

The Senate amendment significantly expands what can be transferred between rental housing developments by adding 'department residual receipts share' as a transferable item, while simultaneously adding strong protective language ensuring transfers cannot impair payments owed to other lenders or public agencies. A new detailed definition for 'department residual receipts share' was added, and the existing 'excess reserves' definition was narrowed to exclude amounts protected by financing documents.

Scope change

The bill's scope expanded to include department residual receipts share as a transferable asset type, while new protective requirements limit how transfers can affect other parties' payment rights. The practical effect is that more funds can be moved between projects, but only in ways that do not harm other lenders or public agencies.

SCOPE

The bill now permits transfer of the 'department residual receipts share' between developments with the same owner, in addition to excess reserves and excess operating income. This broadens the types of funds that can be moved between projects.

REQUIREMENT

A new protective provision (subdivision b) prohibits any transfer from reducing, offsetting, subordinating, or impairing residual receipts, surplus cash, available cashflow, net cashflow, distributable cash, reserve rights, or other payment rights owed to any other lender, public agency, or governmental entity including cities, counties, housing authorities, and holders of federal, state, or local housing program loans.

DEFINITION

A new definition for 'department residual receipts share' was added. It means the portion of residual receipts payable to the department after full satisfaction of all senior debt service and all amounts payable to other lenders or public agencies under the project's financing documents, calculated as if no transfer authority existed.

The definition of 'excess reserves' was narrowed to explicitly exclude any reserve requirements, reserve floors, or other restrictions contained in applicable notes, regulatory agreements, deeds of trust, subordination agreements, intercreditor agreements, or other project financing documents. This means reserves protected by those documents no longer qualify as 'excess.'

TECHNICAL

The digest was updated from 'as introduced' to 'as amended,' page numbers shifted from 99 to 98, and a duplicate subdivision label '(b)' appears in the text (likely a drafting error).

Floor votes · Senate Aug 30, 2026 · Assembly May 28, 2026

How they voted

40–0

Passed

Total votes 40

Aug 30, 2026

D Democratic30

30 Yea

100% Yea

R Republican10

10 Yea

100% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Aug 30, 2026

Introduced

In Assembly. Concurrence in Senate amendments pending.

lower

Aug 30, 2026

Upper · Passed

Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.).

upper

Aug 21, 2026

Upper · Passed

Read third time and amended. Ordered to second reading.

upper

Aug 13, 2026

Upper · Passed

Read second time and amended. Ordered returned to second reading.

upper

Aug 13, 2026

Introduced

From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (August 13).

upper

Aug 3, 2026

Committee

In committee: Referred to APPR. suspense file.

upper

Jun 25, 2026

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 10. Noes 0.) (June 24). Re-referred to Com. on APPR.

upper

Jun 10, 2026

Committee

Referred to Com. on HOUSING.

upper

May 28, 2026

Assembly · Passed

Assembly Vote: pass (77-0-2)

assembly

May 27, 2026

Lower · Passed

Read third time. Passed. Ordered to the Senate. (Ayes 78. Noes 0.)

lower

May 14, 2026

Lower · Passed

From committee: Do pass. (Ayes 15. Noes 0.) (May 14).

lower

Apr 29, 2026

Committee

In committee: Set, first hearing. Referred to APPR. suspense file.

lower

Apr 15, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 12. Noes 0.) (April 15). Re-referred to Com. on APPR.

lower

Apr 2, 2026

Lower · Passed

In committee: Set, first hearing. Hearing canceled at the request of author.

lower

Mar 2, 2026

Committee

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

lower

Feb 18, 2026

Lower · Passed

From printer. May be heard in committee March 20.

lower

1 primary · 0 co-sponsors