CA AB2562

Expands provisions allowing the Department of Housing and Community Development to extend loans, subordinate debt, and invest tax credit equity to include the Multifamily Housing Program and all other multifamily housing loans funded or monitored by the department.

Requires the department to reduce interest rates on loans to rental housing developments utilizing low-income housing tax credits if the loan cannot be treated as debt for tax credit purposes without reduction or if the development cannot syndicate due to negative capital account balances, and if the rate reduction materially increases project feasibility and ensures long-term affordability.

Changes the interest rate adjustment mechanism for loans with extension requests associated with low-income housing tax credits awarded on or after January 1, 2014, to use the applicable federal rate in effect at project closing rather than the most recently published rate.

Authorizes the department to charge administrative fees for loan modifications requested by borrowers, rather than requiring it to charge fees.

Permits the department to forgive accrued interest if changing the interest rate would result in greater total debt than under the original rate, up to the amount necessary to equalize expected principal and accrued interest.