CalCAP Seismic Safety (CalCAP Seismic) General Information

CalCAP Seismic Program Description

• CalCAP Seismic provides a risk management tool to a participating financial institution (PFI) after a borrower has applied to a PFI, the PFI has underwritten the loan and determined a risk management tool will be useful and that the loan fits the eligibility criteria for CalCAP Seismic, and the PFI has disbursed the loan to the borrower.
• After a loan is disbursed by the PFI, the PFI has applied for enrollment in CalCAP Seismic, and enrollment has been approved, contributions for that loan are added to the loan loss reserve assigned to that PFI.
• The accumulated loan loss reserve is available to pay up to 100% of the PFI’s claim for each enrolled loan, during the term of enrollment, in the case of default.
• If no claim for an enrolled loan is made prior to the expiration of enrollment, a portion equal to the PFI’s contribution by a factor of two (2) remains in the loan loss reserve account and the remaining portion of contributions for that loan are recycled back to the program.
• Contribution Amount
  • PFI identifies the amount of the loan which is eligible to enroll ($250,000 maximum)
  • PFI selects contribution percentage between 2 and 3.5% of the enrolled loan amount
  • PFI selects the loan enrollment time frame, five (5) years or 10 years
  • PFI and borrower each contribute the selected percentage of the enrolled loan amount
  • The CalCAP Seismic match varies by the loan enrollment time frame
  • If the borrower is a small business located in a severely affected community (SAC), the program makes an additional matching contribution (SAC contribution)
    • SAC includes areas with emergency or disaster declarations, or high unemployment, or other geographic designations

Eligibility for Enrollment of Loan in CalCAP Seismic

A participating financial institution (PFI) can enroll a qualifying loan made to a qualifying borrower.

• Qualifying loan
  • A loan for the purpose of seismic retrofit construction on an existing commercial or residential building
    • The borrower shall have received a notice, or obtained written identification, from the local authority having jurisdiction (AHJ) that the building is in need of seismic retrofitting
    • The borrower shall have obtained, in writing, a cost estimate from a licensed engineer, architect, or contractor
    • The borrower must obtain all required permits from the AHJ
  • Seismic retrofit construction includes but is not limited to:
    • Anchoring structure to foundation
    • Anchoring fuel storage
    • Bracing cripple walls
    • Bracing water heaters
    • Installing an earthquake-resistant bracing system for mobile homes or manufactured homes
    • Installing automatic gas shutoff valves
    • Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage
    • Strengthening a building’s lateral load resisting system
    • Engineering and architectural design necessary for seismic retrofit
  • Only costs specific to a seismic retrofit of the existing building to mitigate seismic damage in a future earthquake can be included
    • The following are excluded:
      • Maintenance, including abatement of deferred or inadequate maintenance
      • Correction of violations unrelated to the seismic retrofit construction
      • Repair, including repair of earthquake damage
      • Seismic retrofit construction required by local building codes as a result of addition, repair, building relocation, or change of use or occupancy
      • Other work or improvement required by local building or planning codes as a result of the intended seismic retrofit construction
      • Rent reductions or other association compensation, compliance actions, or other related coordination involving the qualified residential property owner or qualified small business and any other party, including a tenant, insurer, or lender
      • Replacement of existing building components, including equipment, except as needed to complete the seismic retrofit construction
      • Bracing or securing nonpermanent building contents
      • The offset of costs, reimbursements, or other costs transferred from the building owner to others
  • Maximum loan amount: $250,000.
• Qualifying building
  • Building is either a type which is potentially vulnerable in the event of a catastrophic earthquake OR is a building constructed before 1981
  • A building which the local authority having jurisdiction has identified in writing as in need of seismic retrofitting
  • Building is a commercial building, OR a building used for business operations, OR a residential building as listed below
    • Single-family residence
    • Multiunit housing building
    • Multiunit housing building with commercial space
    • Mobile home registered with the California Department of Housing and Community Development (HCD)
    • Manufactured home registered with HCD
    • Multifamily manufactured home registered with HCD
  • Building is located in California
• Qualifying borrower
  • California small business which employs 500 or fewer full-time employees and owns a qualified building for business operations OR
  • California commercial property owner which owns a qualified commercial building or a small business which owns one or more qualified commercial buildings OR
  • California residential property owner which owns a qualified residential building or a small business which owns one or more qualified residential building

Frequently Asked Questions (FAQ)

• Frequently asked questions about CalCAP Seismic Safety