Foreclosure Intervention Housing Preservation Program - A Big Win for Community Land Trusts, Affordable Housing Organizations, and Anti-Displacement Activists
Thanks to the amazing advocacy of my client the California Community Land Trust Network, $500 million has been appropriated in the state budget for the creation of the Foreclosure Intervention Housing Preservation Program (FIHPP)!
State Senator Nancy Skinner (left) championed the FIHPP along with Assemblymember Bill Quirk (not pictured). They were inspired by Jocelyn Foreman (right) and the Northern California Land Trust who worked together to use Senator Skinner's foreclosure law, SB 1079, to buy the home that Foreman was renting when it went into foreclosure. Foreman got to stay in her home thanks to a longshot fundraising effort which miraculously succeeded, but it's clear that funds are needed on a large scale to prevent displacement of residents of properties in foreclosure, which the FIHPP seeks to address. Photo by the Sustainable Economies Law Center
What is the FIHPP?
The FIHPP is a new program enumerated by AB140, a housing budget bill signed into law by Governor Newsom on July 19. The purpose of the FIHPP is to promote resident ownership or nonprofit organization ownership of residential real property; the program does this by providing affordable housing non-profits with funding to purchase and re-habitabilite property at risk of foreclosure or in the process of foreclosure. The program is set up to provide a mix of grants and loans for these purposes.
What organizations will be eligible to apply for loans and grants through FIHPP?
Broadly, any “non-profit organization whose primary activity is the development and preservation of affordable housing” will be eligible. Additional eligible organizations include limited-equity housing cooperatives, tenant associations, and local and state governmental bodies.
What buildings are eligible for FIHPP funding?
Any 1 to 25 unit residential properties which meet any one of the following criteria:
(a) The property is purchased in a foreclosure auction.
(b) The property is subject to a recorded notice of default warning of an imminent foreclosure due to lack of mortgage payments.
(c) The property is subject to a “foreclosure risk intervention sale” meaning the property is purchased during a time when the owner is behind on property tax and/or mortgage payments, tenants have initiated litigation against the owner for lack of habitability, or the property shows other signs of distress which are common early indicators of risk of foreclosure.
Who will administer the FIHPP and how will it be administered?
The Department of Housing and Community Development (HCD) will be in charge of creating guidelines for the program and administering it at a higher level. HCD will be required to contract with one or more third-party fund managers or community development financial institutions (CDFIs) to review and approve loan applications, originate and service loans and grants, and create terms and conditions for said loans and grants. HCD may hire third-party consultants to help administer the program; the consultants must have a commitment to racial equity and experience in a variety of property ownership and stewardship models. Part of the funding allocation for the program will also be used to “develop technical assistance tools” to support community organizations with navigating the application process.
When will funds be available?
Currently, we are in the initial stages of implementation. Community advocates will work with HCD to more clearly identify how exactly the program will be administered and identify concrete timelines.
For more information on the FIHPP, please check out the California Community Land Trust Network’s fact sheet. See also Next City’s coverage of this big win, California Puts Up $500 Million for Community Ownership Against Big Real Estate, which describes the work of some of the community land trusts who are members of the California Community Land Trust Network and who worked tirelessly to advocate for this new state program.
Congratulations to the California Community Land Trust Network for this big accomplishment and for their leadership in curbing displacement. The Network was supported by my law practice, by Amy Hines-Shaikh of Wildcat Consulting, and numerous advocacy organizations in this endeavor.
We have lots of work ahead to make sure this program gets smoothly implemented and that properties in foreclosure or at risk of foreclosure go to responsible and community-rooted stewards, so we’ve just barely had time to catch our breath and celebrate. Additional information about program application processes will be forthcoming.