Sept. 15, 2025
SACRAMENTO – Senator Eloise Gomez Reyes’ bill to expand affordable housing financing has cleared the Legislature and now awaits the governor’s signature.
SB 686 authorizes the Department of Housing and Community Development (HCD) to approve the payoff of HCD loans in whole or in part prior to the end of their term and to allow equity extraction from developments for purposes approved by HCD.
The measure, co-sponsored by the California Council for Affordable Housing and the California Housing Consortium, is designed to unlock millions of dollars in loan repayments that could be recycled into new housing production. Affordable housing developers often rely on multiple funding sources, including HCD loans, but current law prohibits repayment of those loans before maturity.