HF 3966

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/28/2022 06:44pm

A bill for an act
relating to housing; establishing a homeownership investment grants program;
establishing a first-time home buyers down payment assistance fund; establishing
a manufactured home revolving fund; requiring reports; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin HOMEOWNERSHIP INVESTMENT GRANTS PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
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new text begin (1) "commissioner" means the commissioner of the housing finance agency; and
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new text begin (2) "eligible organization" means a nonprofit organization the commissioner determines
to be eligible under subdivision 2.
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new text begin Subd. 2. new text end

new text begin Eligible organization. new text end

new text begin To be eligible for a grant under this subdivision, a
nonprofit organization must:
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new text begin (1) be an organization defined under section 501(c)(3) of the Internal Revenue Code or
an equivalent organization;
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new text begin (2) have primary operations located in the state of Minnesota;
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new text begin (3) be certified as a community development financial institution by the United States
Department of the Treasury and must provide affordable housing lending or financing
programs; and
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new text begin (4) serve populations, households, or geographic areas disproportionately affected by
the COVID-19 public health emergency.
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new text begin Subd. 3. new text end

new text begin Eligible services. new text end

new text begin (a) Eligible organizations may apply for housing investment
grants for affordable owner-occupied housing projects for the following:
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new text begin (1) housing development to increase the supply of affordable owner-occupied homes;
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new text begin (2) financing programs for affordable owner-occupied new home construction;
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new text begin (3) acquisition, rehabilitation, and resale of affordable owner-occupied homes or homes
to be converted to owner-occupied homes;
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new text begin (4) financing programs for affordable owner-occupied manufactured housing;
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new text begin (5) services to increase access to stable, affordable, owner-occupied housing in
low-income communities, Indigenous American Indian communities, and communities of
color; and
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new text begin (6) residential counseling or housing navigation assistance for home ownership.
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new text begin (b) Grants must be for services for eligible impacted and disproportionately impacted
households and communities as defined under the American Rescue Plan Act, or a Tribal
government.
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new text begin (c) No more than five percent of the total amount awarded in this section may be for
grants under paragraph (a), clause (3), and no more than five percent of the total amount
awarded under this section may be for grants under paragraph (a), clause (6).
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new text begin (d) Grant awards may be used for revolving loan programs as allowed under the American
Rescue Plan Act. The commissioner shall request approval of the use of revolving loans
under this section from the United States Department of Treasury within 30 days of enactment
of this section.
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new text begin Subd. 4. new text end

new text begin Commissioner duties. new text end

new text begin (a) The commissioner shall consult with eligible
organizations and develop forms, applications, and reporting requirements for use by eligible
organizations. All organizations applying for a grant must include as part of their application
a plan to create new affordable home ownership and home preservation opportunities for
targeted areas and a plan for how the organization will comply with the allowable uses of
grant money under the American Rescue Plan Act. The commissioner shall develop a grant
award scoring system that ensures a distribution of awards throughout the state based on
population and eligible households and communities.
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new text begin (b) The commissioner shall complete the requirements under paragraph (a) within 90
days of enactment of this section.
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new text begin (c) By January 15, 2023, the commissioner must submit a report to the chairs and ranking
minority members of the legislative committees with jurisdiction over housing finance and
policy detailing the use of funds under this section.
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new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin (a) $120,000,000 in fiscal year 2022 is appropriated from the
state fiscal recovery federal fund to the commissioner of the Minnesota Housing Finance
Agency for grants to nonprofit organizations that provide housing development and home
buyer assistance to populations, households, or geographic areas disproportionately affected
by the COVID-19 public health emergency.
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new text begin (b) For the purposes of this section, "state fiscal recovery federal fund" means funds
received by the state from the state fiscal recovery fund in the American Rescue Plan Act,
Public Law 117-2. This is a onetime appropriation and is available until December 31, 2026.
Any funds not obligated by eligible organizations by November 15, 2024, must be returned
to the commissioner of management and budget.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 2. new text begin WORKFORCE HOMEOWNERSHIP PROGRAM; APPROPRIATION.
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new text begin (a) $45,000,000 in fiscal year 2022 is appropriated from the state fiscal recovery federal
fund to the commissioner of the Minnesota Housing Finance Agency for the workforce
homeownership program under Minnesota Statutes, section 462A.38, for eligible projects
under the American Rescue Plan Act.
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new text begin (b) For the purposes of this section, "state fiscal recovery federal fund" means funds
received by the state from the state fiscal recovery fund in the American Rescue Plan Act,
Public Law 117-2. This is a onetime appropriation and is available until December 31, 2026.
Any funds not obligated by eligible organizations by November 15, 2024, must be returned
to the commissioner of management and budget.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 3. new text begin FIRST-TIME HOME BUYERS DOWN PAYMENT ASSISTANCE FUND.
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new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A first-time home buyers down payment assistance fund
is established as a pilot project under the administration of the Midwest Minnesota
Community Development Corporation (MMCDC), a community development financial
institution (CDFI) as defined under the Riegle Community Development and Regulatory
Improvement Act of 1994, to provide targeted assistance to eligible first-time home buyers,
and must serve eligible impacted and disproportionately impacted households and
communities as defined under the American Rescue Plan Act.
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new text begin Subd. 2. new text end

new text begin Eligible home buyer. new text end

new text begin For the purposes of this section an eligible first-time
home buyer is a Minnesota resident whose income is at or below 80 percent of the area
median income at the time of purchase; who is a first-time home buyer as defined under
Code of Federal Regulations, title 24, section 92.2; and who is preapproved for a first
mortgage loan. An eligible home buyer must also meet the eligibility requirements under
the American Rescue Plan Act. An eligible home buyer must, following the purchase of
the home, occupy it as their primary residence. The eligible home buyer must contribute a
minimum of $1,000 to down payment or closing costs.
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new text begin Subd. 3. new text end

new text begin Use of funds. new text end

new text begin Assistance under this section is limited to ten percent of the
purchase price of a home, not to exceed $15,000 per eligible first-time home buyer. The
assistance must be provided in the form of a loan that is forgivable at a rate of 20 percent
per year on the day after the anniversary date of the note. The prorated balance due is
repayable if the property converts to nonowner occupancy, is sold, is subjected to an ineligible
refinance, is subjected to an unauthorized transfer of title, or is subjected to a completed
foreclosure action within the five-year loan term. Funds may be reserved and used for closing
costs, down payment, or principal reduction. The funds must be used in conjunction with
a conforming first mortgage loan that is fully amortizing and meets the standards of a
qualified mortgage. Funds may be used in conjunction with other programs the eligible
home buyer may qualify for and the loan placed in any priority position.
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new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin The first-time home buyers down payment assistance fund
shall be administered by MMCDC and be available for eligible home buyers statewide.
MMCDC shall authorize and reimburse other eligible CDFIs to reserve, originate, fund,
and service funds for eligible first-time home buyers. An eligible CDFI must be licensed
by the state of Minnesota and the Nationwide Multistate Licensing System and Registry
for loan origination and must provide affordable housing lending or financing programs.
Administrative costs must not exceed $1,000 per loan. Any funds made available due to
early resale of a home must be returned to MMCDC for redistribution to eligible first-time
home buyers.
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new text begin Subd. 5. new text end

new text begin Legislative auditor. new text end

new text begin The first-time home buyers down payment assistance fund
is subject to audit by the legislative auditor. MMCDC and participating CDFIs must cooperate
with any audit by the legislative auditor.
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new text begin Subd. 6. new text end

new text begin Creditor immunity for reliance on borrower self-attestations. new text end

new text begin No creditor
shall be subject to liability, including monetary penalties or requirements to indemnify a
federal or state agency or repurchase a loan that has been sold or securitized, for the provision
of down payment assistance under this section to a borrower who does not meet the eligibility
requirements if the creditor does so in good faith reliance on borrower attestations of
eligibility required by this section or regulation.
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new text begin Subd. 7. new text end

new text begin Report to legislature. new text end

new text begin By January 15 each year, MMCDC must report to the
chairs and ranking minority members of the legislative committees having jurisdiction over
housing the following information:
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new text begin (1) the number and amount of loans closed;
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new text begin (2) the mean and median loan amount;
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new text begin (3) the number and amount of grants issued by race or ethnic categories;
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new text begin (4) the mean and median home purchase price;
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new text begin (5) the type of mortgage;
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new text begin (6) the total amount returned to the fund; and
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new text begin (7) the number and amount of grants issued by county.
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new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin (a) $25,000,000 is appropriated in fiscal year 2022 from the
state fiscal recovery federal fund to the commissioner of the Minnesota Housing Finance
Agency as fiscal agent for a grant to MMCDC for purposes of this section. The Housing
Finance Agency may release funds to MMCDC in tranche over the course of the pilot
project.
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new text begin (b) For the purposes of this section, "state fiscal recovery federal fund" means funds
received by the state from the state fiscal recovery fund in the American Rescue Plan Act,
Public Law 117-2. This is a onetime appropriation and is available until December 31, 2026.
Any funds not obligated by November 15, 2024, must be returned to the commissioner of
management and budget.
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new text begin Subd. 9. new text end

new text begin Sunset. new text end

new text begin This section sunsets January 16, 2027, or after the submission of the
final report under subdivision 7.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 4. new text begin HOUSING AFFORDABILITY FUND; FISCAL YEAR 2023 ALLOCATION.
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new text begin (a) $10,000,000 of the allocations from the Housing Finance Agency's housing
affordability fund, or Pool 3, in fiscal year 2023 shall be for a revolving loan fund under
Minnesota Statutes, section 462A.05, subdivision 35, to provide loans with a two percent
interest rate for residents of manufactured home parks to purchase the manufactured home
park in which they reside for the purpose of conversion of the manufactured home park to
cooperative ownership. Repayments of principal and interest from loans issued under this
section must be used for the purposes of this section. The commissioner must make a
determination regarding the issuance of a loan under this section and disburse the funds
within 90 days of receiving a completed application. No money from the allocation under
this paragraph may be used to administer this program. The commissioner must not supplant
other homeownership programs out of Pool 3 to capitalize this revolving loan fund.
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new text begin (b) Each year on January 15, the commissioner of the Housing Finance Agency shall
report to the legislature the allocation of housing affordability funds under paragraph (a),
including the amount issued in loans, the amount of loans repaid, the remaining balance of
the revolving loan fund, the number of projects funded or financed, the number of residents
included in each project, and the location of each project.
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new text begin (c) Nothing in this section shall impair the obligation of the agency to use funds in Pool
3 to satisfy the agency's obligations to holders of bonds secured by the general obligation
pledge of the agency to suggested use of agency resources.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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