The LPR Program provides for the restructuring of existing State multifamily housing loans funded or monitored by HCD, with the intent to preserve affordable housing units that would have been lost to termination of the regulatory provisions restricting rents and occupancy, address physical deterioration of the property, improve project fiscal integrity, allow for the extraction of equity from eligible developments to further the State’s affordable housing goals, and allow for the rehabilitation or replacement of affordable housing units, including single-room occupancy (SRO) conversions. (Health and Safety Code Sections 50406.4, 50406.6, 50406.7, 50406.8, 50560, 50561, 50562, and 50565, as amended by AB 2562, AB 130, SB 686, and SB 21)
Program Overview
Assembly Bill 1699 (AB 1699) was enacted in 2012 and authorized HCD to restructure existing loans in specified HCD loan programs. HCD adopted Amended LPR Guidelines effective June 9, 2026, implementing the provisions of AB 2562, AB 130, SB 686, and SB 21. These amendments expand eligibility to Multifamily Housing Program (MHP) loans, introduce provisions for Extracted Equity transactions, add SB 21 compliance requirements for single-room occupancy (SRO) units, and establish a revised fee structure. Read more about the Loan Portfolio Restructuring Program.
Restructuring means one or more of the following:
- Extension of the original HCD loan term(s)
- Reinstatement of a Qualifying Unpaid Matured Loan
- Subordination of the HCD loan(s) to a new senior loan(s)
- Payoff of a Department loan prior to maturity
- Utilization of Extracted Equity from a Donor Project
- Syndication or resyndication of a Project with tax credits
The LPR Program applies exclusively to restructuring loans originally funded under the following HCD programs:
- Rental Housing Construction Program Original (RHCP-O) established by Chapter 9 (commencing with Section 50735)
- Special User Housing Rehabilitation Program (SUHRP) established by Chapter 6.5 (commencing with Section 50670)
- Deferred Payment Rehabilitation Loan Program (DPRLP) established by Chapter 6.5 (commencing with Section 50660)
- The rental component of the California Natural Disaster Assistance Program (CALDAP) established by Chapter 6.5 (commencing with Section 50671)
- State Earthquake Rehabilitation Assistance Program (SERA) established by Chapter 6.5 (commencing with Section 50671)
- The rental component of the California Housing Rehabilitation Program (CHRP-R) established by Section 50668.5
- The component of the Rental Housing Construction Program funded with bond proceeds (RHCP-B) pursuant to Section 50771.1
- Family Housing Demonstration Program (FHDP) established by Chapter 15 (commencing with Section 50880)
- Families Moving to Work Program (FMTW) established by Chapter 15 (commencing with Section 50880)
- Housing Loan Conversion Program (HLCP) established by Section 50560
- Loan Portfolio Restructuring Program (LPR) established by Section 50561
- Multifamily Housing Program (MHP) established by Chapter 6.7 (commencing with Section 50675)
- Multifamily Housing Program – Supportive Housing (SHMHP) established by Section 50675
- Multifamily Housing Program – Homeless Youth (HYMHP) established by Section 50675
- Multifamily Housing Program – Governor’s Homeless Initiative (GHI) established by Section 50675
HCD may also approve restructuring of any State funded multifamily housing loan funded or monitored by the Department under the authority of Health and Safety Code Section 50560(a).