SECTIONS 1917.010 - California Statutes

CIVIL CODE

SECTION 1917.010

1917.010. The Legislature hereby finds and declares that:
(a) It is necessary and essential that the state provide and
promote alternative means of supplying affordable housing to the
citizens of the state.
(b) High interest rates have caused payment schedules for new
long-term, fixed-rate and adjustable-rate mortgages to exceed
affordable levels for the vast majority of the state's households.
(c) Because of current economic conditions, including high and
volatile interest rates, alternative mortgage instruments must be
developed to supplement the standard long-term, fixed-rate mortgage.
(d) Because the interest to which the lender is entitled under a
shared appreciation mortgage includes a share of the appreciated
value of the property securing the loan, the periodic payments under
a shared appreciation mortgage are lower and, therefore, more
affordable to borrowers than under a mortgage in which the lender's
interest does not include a share of the appreciated value of the
property. State authorization of the shared appreciation loan for
pension fund lenders will serve the need to develop alternative and
more affordable means of financing the construction of new housing
and the subsequent marketing of new homes, and to create vitally
needed jobs in the construction industry.
(e) Pension funds may find shared appreciation loans suited to
their investment needs since yields are keyed to appreciation in
property values, which may serve as a hedge against inflation.