Assembly BillVetoedGovernment
AB 2166: Multifamily housing development: offsite housing factories: backstop financing.
What AB 2166 does, verified September 20, 2026
The bill establishes a multifamily backstop financing program to support multifamily projects through state-backed credit backstops. This program will enable surety companies to issue payment and performance bonds to qualified offsite housing factories in the state. The program will provide credit backstops to surety companies and surety insurers that issue construction bonds according to specified parameters. The program will be implemented by the California Housing Finance Agency, which will adopt rules and regulations necessary to support the program. The legislature intends to prioritize and review applications received through this program.
Bill journey
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Last action: Vetoed by Governor. (2026-09-18)Alert me
Author and sponsors
Full contact details, staff, and committees with Connect, $16/moUnlockRecent actions26 total · showing 5
| Sep. 18, 2026 | Vetoed by Governor. |
| Sep. 04, 2026 | Enrolled and presented to the Governor at 4 p.m. |
| Aug. 27, 2026 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 73. Noes 1. Page 6689.). |
| Aug. 27, 2026 | In Assembly. Concurrence in Senate amendments pending. |
| Aug. 26, 2026 | Read third time. Passed. Ordered to the Assembly. (Ayes 37. Noes 0.). |
Latest bill textEnrolled version, September 1, 2026 · 902 words
| Enrolled September 01, 2026 |
| Passed IN Senate August 26, 2026 |
| Passed IN Assembly August 27, 2026 |
| Amended IN Senate August 20, 2026 |
| Amended IN Assembly April 27, 2026 |
| Amended IN Assembly March 19, 2026 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 2166
| Introduced by Assembly Members Carrillo and Wicks (Coauthors: Assembly Members Mark González, Hoover, and Quirk-Silva) |
February 18, 2026 |
An act to add Chapter 7 (commencing with Section 63089.100) to Division 1 of Title 6.7 of the Government Code, relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
AB 2166, Carrillo. Multifamily housing development: offsite housing factories: backstop financing.
The Bergeson-Peace Infrastructure and Economic Development Bank Act creates within the Governor’s Office of Business and Economic Development the California Infrastructure and Economic Development Bank (bank) and requires it to administer the act, which, among other things, provides for the financing of certain economic development projects.
This bill would establish, upon appropriation by the Legislature, the Multifamily Backstop Financing Program (program), for purposes of supporting multifamily projects through the provision of state-backed credit backstops that would enable surety companies to issue payment and performance bonds to qualified offsite housing factories in the state. The bill would authorize the bank to provide credit backstops to surety companies and surety insurers that issue construction bonds according to specified parameters. The bill would require the bank to adopt rules and regulations necessary to implement the program.
The people of the State of California do enact as follows:
SECTION 1.
Chapter 7 (commencing with Section 63089.100) is added to Division 1 of Title 6.7 of the Government Code, to read:CHAPTER 7. Multifamily Backstop Financing
63089.100.
The Legislature finds and declares all of the following:(a) California’s offsite housing manufacturing sector is stuck in a self-reinforcing cycle that blocks scale and prevents the industry from delivering on its promise of faster, lower cost construction.
(b) In multifamily, stick-built construction, owners, lenders, and general contractors use surety bonds, such as performance and payment bonds, to reduce the risk that a contractor or subcontractor fails to perform or fails to pay downstream parties.
(c) These bonds are generally required by general contractors and owners for “material” or large scopes on a housing development, as bonding increases confidence in schedule and delivery reliability, which supports construction lending and public financing. Without bonding, factories are treated as nonstandard or high risk by general contractors and developers, thus constraining adoption even when product quality is strong.
(d) However, sureties are reluctant to issue bonds to scaling factories due to limited operating history, nontraditional assets, and volatile cashflow. Without bonding, developers are required to take on additional, and often untenable, risk of financial loss to work with factories. In turn, factories are unable to win sufficient projects to build a track record and stable pipeline. Resulting factory failures mean the state loses a pathway to lower cost, higher throughput housing production.
(e) This cycle is a market failure with broad public consequences. Without an intervention that addresses the risk of factory failure through bonding, California may struggle to stabilize factory capacity, drive cost reductions through repetition and scale, and translate offsite innovation into real housing delivery.
(f) Therefore, California’s offsite construction industry must be stabilized and scaled for purposes of reducing construction costs over time and addressing the state’s housing shortage. To support this objective, this chapter establishes a state-backed credit backstop to enable surety companies to issue payment and performance bonds to support offsite housing factories in the state that assist multifamily housing builds in the state.
63089.101.
For purposes of this chapter, the following definitions shall apply:(a) “Program” means the Multifamily Backstop Financing Program established by this chapter.
(b) “Qualified applicant” means a surety company or surety insurer that issues construction bonds.
(c) “Qualified factory” means an offsite housing factory, whether volumetric, panelized, or otherwise, in the state that delivers obligations for qualified multifamily projects.
(d) “Qualified multifamily project” means a project located in the state that consists of multifamily residential uses only or a mix of multifamily residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use.
(e) “Tail risk” means a risk that occurs either when the frequency of low probability events is higher than expected under a normal probability distribution or when there are observed events of very significant size or magnitude.
63089.102.
(a) There is hereby established, upon appropriation by the Legislature, the Multifamily Backstop Financing Program for purposes of supporting multifamily projects through the provision of state-backed credit backstops that would enable surety companies to issue payment and performance bonds to offsite housing factories in the state, as described in this chapter.(b) Under the program, the bank may provide credit backstops to qualified applicants in accordance with the following:
(1) A credit backstop shall be issued only to qualified applicants if the backstop will be used by the applicant to issue payment bonds or performance bonds to qualified factories on qualified multifamily projects.
(2) The credit backstop shall cover 90 percent of the payment or performance bond value, at the discretion of the bank.
(3) The credit backstop shall not replace surety underwriting and shall only be used to reduce tail risk. The qualified applicant shall continue to decide the specific details of the payment or performance bond following industry standards.
63089.103.
The bank shall adopt rules and regulations necessary to implement this chapter.Text of AB 2166 as enrolled, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions