1.1                          A bill for an act 
  1.2             relating to housing programs; modifying eligibility 
  1.3             for accessibility loans; authorizing equity take-out 
  1.4             loans for section 236 rental property; clarifying 
  1.5             eligible projects under the housing trust fund; 
  1.6             modifying eligible uses of the mortgage foreclosure 
  1.7             prevention and emergency rental assistance program; 
  1.8             repealing the special needs housing for homeless 
  1.9             persons program; amending Minnesota Statutes 1996, 
  1.10            sections 268.38, subdivision 7; 462A.05, subdivisions 
  1.11            14d, 30, 39, and by adding a subdivision; 462A.201, 
  1.12            subdivision 2; 462A.207, subdivisions 1, 2, 3, 4, and 
  1.13            6; 462A.21, subdivision 12a; repealing Minnesota 
  1.14            Statutes 1996, sections 268.39; 462A.05, subdivision 
  1.15            20; and 462A.21, subdivisions 4k, 12, and 14. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17                                 A
  1.18     Section 1.  Minnesota Statutes 1996, section 462A.05, 
  1.19  subdivision 14d, is amended to read: 
  1.20     Subd. 14d.  [ACCESSIBILITY LOAN PROGRAM.] Rehabilitation 
  1.21  loans authorized under subdivision 14 may be made to eligible 
  1.22  persons and families households without limitations relating to 
  1.23  the maximum incomes of the borrowers. 
  1.24     A person or family household is eligible to receive an 
  1.25  accessibility loan under the following conditions: 
  1.26     (1) the borrower or a member of an individual residing in 
  1.27  the borrower's family requires a level of care provided in a 
  1.28  hospital, skilled nursing facility, or intermediate care 
  1.29  facility for persons with mental retardation or related 
  1.30  conditions; home has a permanent physical or mental condition 
  2.1   that substantially limits one or more major life activities; and 
  2.2      (2) home care is appropriate; and 
  2.3      (3) (2) the improvement to the housing will enable assist 
  2.4   the borrower or a member of the borrower's family to reside 
  2.5   household in residing in the housing. 
  2.6      Sec. 2.  Minnesota Statutes 1996, section 462A.05, 
  2.7   subdivision 39, is amended to read: 
  2.8      Subd. 39.  [EQUITY TAKE-OUT LOANS.] The agency may make 
  2.9   equity take-out loans to owners of section 8 project-based and 
  2.10  section 236 rental property upon which the agency holds a first 
  2.11  mortgage.  The owner of a section 8 project-based rental 
  2.12  property must agree to participate in the section 8 program and 
  2.13  extend the low-income affordability restrictions on the housing 
  2.14  for the maximum term of the section 8 contract.  The owner of 
  2.15  section 236 rental property must agree to participate in the 
  2.16  section 236 interest reduction payments program, to extend any 
  2.17  existing low income affordability restrictions on the housing, 
  2.18  and to extend any rental assistance payments for the maximum 
  2.19  term permitted under the agreement for rental assistance 
  2.20  payments.  The equity take-out loan must be secured by a 
  2.21  subordinate loan on the property and may include additional 
  2.22  appropriate security determined necessary by the agency. 
  2.23     Sec. 3.  Minnesota Statutes 1996, section 462A.05, is 
  2.24  amended by adding a subdivision to read: 
  2.25     Subd. 41.  [DEMONSTRATION GRANTS.] The agency may make 
  2.26  demonstration grants to owners or managers of multifamily rental 
  2.27  property upon which the agency holds a mortgage for the purpose 
  2.28  of developing or coordinating services that promote the tenant's 
  2.29  ability to live independently, support the tenant's 
  2.30  self-sufficiency, improve the relationship between the tenants 
  2.31  and the community, or that otherwise strengthen the community. 
  2.32     Sec. 4.  Minnesota Statutes 1996, section 462A.201, 
  2.33  subdivision 2, is amended to read: 
  2.34     Subd. 2.  [LOW-INCOME HOUSING.] (a) The agency may, in 
  2.35  consultation with the advisory committee, use money from the 
  2.36  housing trust fund account to provide loans or grants for 
  3.1   projects for the development, construction, acquisition, 
  3.2   preservation, and rehabilitation of low-income rental and 
  3.3   limited equity cooperative housing units, including temporary 
  3.4   and transitional housing, and homes for ownership.  Loans or 
  3.5   grants for residential housing for migrant farmworkers may be 
  3.6   made under this section.  No more than 20 percent of available 
  3.7   funds may be used for home ownership projects.  
  3.8      (b) A rental or limited equity cooperative permanent 
  3.9   housing project must meet one of the following income tests: 
  3.10     (1) at least 75 percent of the rental and cooperative units 
  3.11  must be rented to or cooperatively owned by persons and families 
  3.12  whose income does not exceed 30 percent of the median family 
  3.13  income for the metropolitan area as defined in section 473.121, 
  3.14  subdivision 2; or 
  3.15     (2) all of the units funded by the housing trust fund 
  3.16  account must be used for the benefit of persons and families 
  3.17  whose income does not exceed 30 percent of the median family 
  3.18  income for the metropolitan area as defined in section 473.121, 
  3.19  subdivision 2. 
  3.20     The median family income may be adjusted for families of 
  3.21  five or more. 
  3.22     (c) Homes for ownership must be owned or purchased by 
  3.23  persons and families whose income does not exceed 50 percent of 
  3.24  the metropolitan area median income, adjusted for family size. 
  3.25     (d) In making the grants, the agency shall determine the 
  3.26  terms and conditions of repayment and the appropriate security, 
  3.27  if any, should repayment be required.  To promote the geographic 
  3.28  distribution of grants and loans, the agency may designate a 
  3.29  portion of the grant or loan awards to be set aside for projects 
  3.30  located in specified congressional districts or other 
  3.31  geographical regions specified by the agency.  The agency may 
  3.32  adopt rules for awarding grants and loans under this subdivision.
  3.33     Sec. 5.  Minnesota Statutes 1996, section 462A.207, 
  3.34  subdivision 1, is amended to read: 
  3.35     Subdivision 1.  [ESTABLISHMENT.] The agency shall, within 
  3.36  the limits of available appropriations, establish a mortgage 
  4.1   foreclosure prevention and emergency rental assistance program 
  4.2   to provide assistance to low-income and moderate-income persons 
  4.3   who are facing the loss of their housing due to circumstances 
  4.4   beyond their control.  Priority for assistance under this 
  4.5   section must be given to persons and families at or below 60 
  4.6   percent of area median income, adjusted for family size, as 
  4.7   determined by the department of housing and urban development. 
  4.8      Sec. 6.  Minnesota Statutes 1996, section 462A.207, 
  4.9   subdivision 2, is amended to read: 
  4.10     Subd. 2.  [ADMINISTRATION.] The agency may contract with 
  4.11  community-based, nonprofit organizations that meet the 
  4.12  requirements specified in this section to provide either 
  4.13  mortgage foreclosure assistance or rental assistance, or both.  
  4.14  Preference must be given to nonprofit organizations that 
  4.15  demonstrate the greatest ability to leverage program money with 
  4.16  other sources of funding, or to organizations serving areas 
  4.17  without access to mortgage foreclosure assistance or rental 
  4.18  assistance.  The agency may require an organization to match 
  4.19  program money with other money or resources. 
  4.20     Sec. 7.  Minnesota Statutes 1996, section 462A.207, 
  4.21  subdivision 3, is amended to read: 
  4.22     Subd. 3.  [ORGANIZATION ELIGIBILITY.] A nonprofit 
  4.23  organization must be able to demonstrate that it is qualified to 
  4.24  deliver program services, has relevant expertise in mortgage 
  4.25  foreclosure prevention or landlord and tenant procedures, and is 
  4.26  able to perform the duties required under the program.  An 
  4.27  organization must provide the agency with a detailed description 
  4.28  of how the proposed program would be administered, including the 
  4.29  qualifications of staff.  An organization may not be part of, 
  4.30  nor affiliated with, a mortgage lender nor provide assistance to 
  4.31  a household which occupies a housing unit owned or managed by 
  4.32  the organization. 
  4.33     Sec. 8.  Minnesota Statutes 1996, section 462A.207, 
  4.34  subdivision 4, is amended to read: 
  4.35     Subd. 4.  [SELECTION CRITERIA.] The agency shall take the 
  4.36  following criteria into consideration when determining whether 
  5.1   an organization is qualified to administer the program: 
  5.2      (1) the prior experience of the nonprofit organization in 
  5.3   establishing, administering, and maintaining a mortgage 
  5.4   foreclosure prevention or a rental assistance program; 
  5.5      (2) the documented familiarity of the organization 
  5.6   regarding mortgage foreclosure prevention procedures, landlord 
  5.7   and tenant procedures, and other services available to assist 
  5.8   with preventing the loss of housing; 
  5.9      (3) the reasonableness of the proposed budget in meeting 
  5.10  the program objectives; 
  5.11     (4) the documented ability of the organization to provide 
  5.12  financial assistance; and 
  5.13     (5) the documented ability of the organization to provide 
  5.14  mortgage foreclosure prevention or other financial or tenant 
  5.15  counseling. 
  5.16     Sec. 9.  Minnesota Statutes 1996, section 462A.207, 
  5.17  subdivision 6, is amended to read: 
  5.18     Subd. 6.  [ASSISTANCE.] (a) Program assistance includes 
  5.19  general information, screening, assessment, referral services, 
  5.20  case management, advocacy, and financial assistance to borrowers 
  5.21  who are delinquent on mortgage, or contract for deed, or rent 
  5.22  payments. 
  5.23     (b) Not more than one-half of program funding may be used 
  5.24  for mortgage or financial counseling services. 
  5.25     (c) Financial assistance consists of: 
  5.26     (1) payments for delinquent mortgage or contract for deed 
  5.27  payments, future mortgage or contract for deed payments for a 
  5.28  period of up to six months, property taxes, assessments, 
  5.29  utilities, insurance, home improvement repairs, future rent 
  5.30  payments for a period of up to six months, and relocation costs 
  5.31  if necessary, or other costs necessary to prevent foreclosure; 
  5.32  or. 
  5.33     (2) delinquent rent payments, utility bills, any fees or 
  5.34  costs necessary to redeem the property, future rent payments for 
  5.35  a period of up to six months, and relocation costs if necessary. 
  5.36     (d) An individual or family may receive the lesser of six 
  6.1   months or $4,500 of financial assistance. 
  6.2      Sec. 10.  [REPEALER.] 
  6.3      Minnesota Statutes 1996, sections 268.39; 462A.05, 
  6.4   subdivision 20; and 462A.21, subdivisions 4k, 12, and 14; are 
  6.5   repealed. 
  6.6                                  B
  6.7                          CONFORMING CHANGES
  6.8      Sec. 11.  Minnesota Statutes 1996, section 268.38, 
  6.9   subdivision 7, is amended to read: 
  6.10     Subd. 7.  [FUNDING COORDINATION.] Grant recipients shall 
  6.11  combine funds awarded under this section with other funds from 
  6.12  public and private sources. Programs receiving funds under this 
  6.13  section are also eligible for assistance under section 462A.05, 
  6.14  subdivision 20.  
  6.15     Sec. 12.  Minnesota Statutes 1996, section 462A.05, 
  6.16  subdivision 30, is amended to read: 
  6.17     Subd. 30.  [AGENCY INVESTMENT IN CERTAIN NOTES AND 
  6.18  MORTGAGES.] It may invest in, purchase, acquire, and take 
  6.19  assignments of existing notes and mortgages not closed for the 
  6.20  purpose of sale to the agency, from lenders that are nonprofit 
  6.21  or nonprofit entities, as defined in the agency's rules, 
  6.22  provided that:  (1) the notes and mortgages evidence loans for 
  6.23  the construction, rehabilitation, purchase, improvement, or 
  6.24  refinancing of residential housing intended for occupancy and 
  6.25  occupied by low- and moderate-income persons and families; and 
  6.26  (2) the loan sellers utilize the funds derived from the 
  6.27  purchases in accordance with the authority contained in section 
  6.28  462A.07, subdivision 12, for the purposes and objectives of 
  6.29  sections 462A.02, 462A.03, 462A.05, 462A.07, and 462A.21; and 
  6.30  (3) the purchases are subject to security and limitations on the 
  6.31  costs and expenses of the loan sellers incidental to the 
  6.32  utilization of the purchase proceeds as the agency may 
  6.33  determine.  The proceeds of the purchases authorized by this 
  6.34  subdivision shall not be subject to the limitations of section 
  6.35  462A.21, subdivisions 4k, 6, 9, and 12 6 and 9.  In addition, it 
  6.36  may invest in, purchase, acquire, and take assignments of 
  7.1   existing federally insured mortgages for multifamily housing, 
  7.2   not closed for the purpose of sale to the agency, from any 
  7.3   banking institution, savings association, or other lender or 
  7.4   financial intermediary approved by the members; provided that 
  7.5   the multifamily housing is benefited by contracts for federal 
  7.6   housing assistance payments. 
  7.7      Sec. 13.  Minnesota Statutes 1996, section 462A.21, 
  7.8   subdivision 12a, is amended to read: 
  7.9      Subd. 12a.  [PROGRAM MONEY TRANSFER.] Grants authorized 
  7.10  under section 462A.05, subdivision 20, may be made only with 
  7.11  specific appropriations by the legislature, but Unencumbered 
  7.12  balances of money appropriated for the purpose of loans or 
  7.13  grants for agency programs under these subdivisions may be 
  7.14  transferred between programs created by these subdivisions or in 
  7.15  accordance with section 462A.20, subdivision 3.