Sacramento - Governor Schwarzenegger has signed AB 983, a law authored by Assemblymember John Laird (D-Santa Cruz) that extends by two years the provision that provides low- and moderate-income first-time homebuyers with down payment assistance.

"With this bill, RDA will continue helping first-time buyers bridge the gap between affordability and ever-rising prices," said Assemblymember Laird. "The First-time Homebuyer Program is an important part of a comprehensive affordable housing strategy."

State law requires that a redevelopment agency operating a First-time Homebuyer Program may only consider 30% of household income for low-income applicants and 35% for moderate income applicants. AB 983 extends by two years the pilot program in Santa Cruz County that allows redevelopment agencies to consider up to 40% of an applicant's household income in determining eligibility for down payment assistance.

The assistance provided by Santa Cruz County redevelopment agencies operates as a shared-appreciation loan. Redevelopment agencies recoup the "loan" amount plus a share of the home's appreciation upon sale or transfer of the home. The County of Santa Cruz and the City of Watsonville operate the two most active First-time Homebuyer programs, and neither has reported a single mortgage default.

Also, for the first time, the bill extends the program to Monterey County, as well as Contra Costa County.

Assemblymember Laird is chair of the Assembly Budget Committee and serves as a member of the Judiciary, Labor and Employment, and Natural Resources Committees.