SF 2298

1st Engrossment - 94th Legislature (2025 - 2026)

Posted on 04/09/2025 03:05 p.m.

A bill for an act
relating to housing; establishing budget for Minnesota Housing Finance Agency;
making policy, finance, and technical changes to housing provisions; establishing
a task force on homeowners and commercial property insurance; transferring
money; requiring a report; appropriating money; amending Minnesota Statutes
2024, sections 327C.095, subdivision 12; 462A.051, subdivision 2; 462A.07,
subdivision 19, by adding a subdivision; 462A.2095, subdivision 3; 462A.33,
subdivisions 2, 9; 462A.40, subdivision 3; Laws 2023, chapter 37, article 1, section
2, subdivisions 20, 21, 29, as amended; article 2, section 10; proposing coding for
new law in Minnesota Statutes, chapter 462A; repealing Minnesota Statutes 2024,
sections 16A.287; 462A.43.

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

ARTICLE 1

APPROPRIATIONS

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agency
for the purposes specified in this article. The appropriations are from the general fund, or
another named fund, and are available for the fiscal years indicated for each purpose. The
figures "2026" and "2027" used in this article mean that the appropriations listed under them
are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively. "The
first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium" is
fiscal years 2026 and 2027.
new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2026 new text end		new text begin 2027 new text end

Sec. 2. new text begin HOUSING FINANCE AGENCY new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 96,948,000 new text end

new text begin $ new text end

new text begin 82,798,000 new text end

new text begin (a) The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin (b) Unless otherwise specified, the
appropriations for the programs in this section
are appropriated and made available for the
purposes of the housing development fund.
Except as otherwise indicated, the amounts
appropriated are part of the agency's
permanent budget base.
new text end

new text begin (c) Notwithstanding Minnesota Statutes,
section 16B.98, subdivision 14, the
commissioner must not use any amount of this
total appropriation for administrative costs.
new text end

new text begin Subd. 2. new text end new text begin Challenge Program new text end

new text begin 12,925,000 new text end

new text begin 12,925,000 new text end

new text begin (a) This appropriation is for the economic
development and housing challenge program
under Minnesota Statutes, section 462A.33
and 462A.07, subdivision 14.
new text end

new text begin (b) Of this amount, $1,208,000 each year shall
be made available during the first 11 months
of the fiscal year exclusively for housing
projects for American Indians. Any funds not
committed to housing projects for American
Indians within the annual consolidated request
for funding processes may be available for
any eligible activity under Minnesota Statutes,
sections 462A.33 and 462A.07, subdivision
14.
new text end

new text begin Subd. 3. new text end new text begin Workforce Housing Development new text end

new text begin 2,000,000 new text end

new text begin 2,000,000 new text end

new text begin This appropriation is for the Greater
Minnesota workforce housing development
program under Minnesota Statutes, section
462A.39. If requested by the applicant and
approved by the agency, funded properties
may include a portion of income and rent
restricted units. Funded properties may include
owner-occupied homes.
new text end

new text begin Subd. 4. new text end new text begin Manufactured Home Park Infrastructure Grants new text end

new text begin 1,000,000 new text end

new text begin 1,000,000 new text end

new text begin This appropriation is for manufactured home
park infrastructure grants under Minnesota
Statutes, section 462A.2035, subdivision 1b.
new text end

new text begin Subd. 5. new text end new text begin Workforce Homeownership Program new text end

new text begin 250,000 new text end

new text begin 250,000 new text end

new text begin This appropriation is for the workforce
homeownership program under Minnesota
Statutes, section 462A.38.
new text end

new text begin Subd. 6. new text end new text begin Rent Assistance Program new text end

new text begin 23,000,000 new text end

new text begin 23,000,000 new text end

new text begin This appropriation is for the rent assistance
program under Minnesota Statutes, section
462A.2095.
new text end

new text begin Subd. 7. new text end new text begin Housing Trust Fund new text end

new text begin 11,646,000 new text end

new text begin 11,646,000 new text end

new text begin This appropriation is for deposit in the housing
trust fund account created under Minnesota
Statutes, section 462A.201, and may be used
for the purposes provided in that section.
new text end

new text begin Subd. 8. new text end new text begin Homework Starts with Home new text end

new text begin 2,750,000 new text end

new text begin 2,750,000 new text end

new text begin This appropriation is for the homework starts
with home program under Minnesota Statutes,
sections 462A.201, subdivision 2, paragraph
(a), clause (4), and 462A.204, subdivision 8,
to provide assistance to homeless families,
those at risk of homelessness, or highly mobile
families.
new text end

new text begin Subd. 9. new text end new text begin Rental Assistance for Mentally Ill new text end

new text begin 5,338,000 new text end

new text begin 5,338,000 new text end

new text begin (a) This appropriation is for the rental housing
assistance program for persons with a mental
illness or families with an adult member with
a mental illness under Minnesota Statutes,
section 462A.2097. Among comparable
proposals, the agency shall prioritize those
proposals that target, in part, eligible persons
who desire to move to more integrated,
community-based settings.
new text end

new text begin (b) Notwithstanding any law to the contrary,
this appropriation may be used for risk
mitigation funds, landlord incentives, or other
costs necessary to decrease the risk of
homelessness, as determined by the agency.
new text end

new text begin Subd. 10. new text end new text begin Family Homeless Prevention new text end

new text begin 20,419,000 new text end

new text begin 10,269,000 new text end

new text begin (a) This appropriation is for the family
homeless prevention and assistance program
under Minnesota Statutes, section 462A.204.
new text end

new text begin (b) Notwithstanding any law to the contrary,
this appropriation may be used for program
costs necessary to decrease the risk of
homelessness and improve the effectiveness
of the program, as determined by the agency.
new text end

new text begin (c) When a new grantee works with a current
or former grantee in a given geographic area,
a new grantee may work with either an
advisory committee as required under
Minnesota Statutes, section 462A.204,
subdivision 6, or the local continuum of care
and is not required to meet the requirements
of Minnesota Statutes, section 462A.204,
subdivision 4.
new text end

new text begin Subd. 11. new text end new text begin Home Ownership Assistance Fund new text end

new text begin 885,000 new text end

new text begin 885,000 new text end

new text begin This appropriation is for the home ownership
assistance program under Minnesota Statutes,
section 462A.21, subdivision 8. The agency
shall continue to strengthen its efforts to
address the disparity gap in the
homeownership rate between white
households and indigenous American Indians
and communities of color. To better
understand and address the disparity gap, the
agency is required to collect, on a voluntary
basis, demographic information regarding
race, color, national origin, and sex of
applicants for agency programs intended to
benefit homeowners and homebuyers.
new text end

new text begin Subd. 12. new text end new text begin Affordable Rental Investment Fund new text end

new text begin 4,218,000 new text end

new text begin 4,218,000 new text end

new text begin (a) This appropriation is for the affordable
rental investment fund program under
Minnesota Statutes, section 462A.21,
subdivision 8b, to finance the acquisition,
rehabilitation, and debt restructuring of
federally assisted rental property and for
making equity take-out loans under Minnesota
Statutes, section 462A.05, subdivision 39.
new text end

new text begin (b) The owner of federally assisted rental
property must agree to participate in the
applicable federally assisted housing program
and to extend any existing low-income
affordability restrictions on the housing for
the maximum term permitted.
new text end

new text begin (c) The appropriation also may be used to
finance the acquisition, rehabilitation, and debt
restructuring of existing supportive housing
properties and naturally occurring affordable
housing as determined by the commissioner.
For purposes of this paragraph, "supportive
housing" means affordable rental housing with
links to services necessary for individuals,
youth, and families with children to maintain
housing stability.
new text end

new text begin Subd. 13. new text end new text begin Owner-Occupied Housing Rehabilitation new text end

new text begin 2,772,000 new text end

new text begin 2,772,000 new text end

new text begin (a) This appropriation is for the rehabilitation
of owner-occupied housing under Minnesota
Statutes, section 462A.05, subdivisions 14 and
14a.
new text end

new text begin (b) Notwithstanding any law to the contrary,
grants or loans under this subdivision may be
made without rent or income restrictions of
owners or tenants. To the extent practicable,
grants or loans must be made available
statewide.
new text end

new text begin Subd. 14. new text end new text begin Rental Housing Rehabilitation new text end

new text begin 3,743,000 new text end

new text begin 3,743,000 new text end

new text begin (a) This appropriation is for the rehabilitation
of eligible rental housing under Minnesota
Statutes, section 462A.05, subdivision 14. In
administering a rehabilitation program for
rental housing, the agency may apply the
processes and priorities adopted for
administration of the economic development
and housing challenge program under
Minnesota Statutes, section 462A.33, and may
provide grants or forgivable loans if approved
by the agency.
new text end

new text begin (b) Notwithstanding any law to the contrary,
grants or loans under this subdivision may be
made without rent or income restrictions of
owners or tenants. To the extent practicable,
grants or loans must be made available
statewide.
new text end

new text begin Subd. 15. new text end new text begin Homeownership Education, Counseling, and Training new text end

new text begin 857,000 new text end

new text begin 857,000 new text end

new text begin This appropriation is for the homeownership
education, counseling, and training program
under Minnesota Statutes, section 462A.209.
new text end

new text begin Subd. 16. new text end new text begin Capacity Building Grants new text end

new text begin 645,000 new text end

new text begin 645,000 new text end

new text begin This appropriation is for capacity building
grants under Minnesota Statutes, section
462A.21, subdivision 3b.
new text end

new text begin Subd. 17. new text end new text begin Build Wealth MN new text end

new text begin 500,000 new text end

new text begin 500,000 new text end

new text begin This appropriation is for a grant to Build
Wealth Minnesota to provide a family
stabilization plan program including program
outreach, financial literacy education, and
budget and debt counseling.
new text end

new text begin Subd. 18. new text end new text begin Greater Minnesota Housing Infrastructure Grant Program new text end

new text begin 2,000,000 new text end

new text begin -0- new text end

new text begin This appropriation is for the greater Minnesota
housing infrastructure grant program under
Minnesota Statutes, section 462A.395. The
base for this appropriation is $500,000 in fiscal
year 2028 and each year thereafter.
new text end

new text begin Subd. 19. new text end new text begin Community-Based First-Generation Homebuyers Down Payment Assistance Program new text end

new text begin 2,000,000 new text end

new text begin -0- new text end

new text begin This appropriation is for a grant to Midwest
Minnesota Community Development
Corporation (MMCDC), through its wholly
owned subsidiary CDC Investments, Inc., for
the community-based first-generation
homebuyers down payment assistance
program under Minnesota Statutes, section
462A.415. At the end of each biennium,
MMCDC must remit any unused funds to the
Minnesota Housing Finance Agency. Funds
remitted to the agency under this subdivision
are appropriated to the agency to administer
the workforce and affordable homeownership
development program under Minnesota
Statutes, section 462A.38. The base for this
appropriation is $450,000 in fiscal year 2028
and each year thereafter.
new text end

new text begin Subd. 20. new text end new text begin Availability and Transfer of Funds new text end

new text begin Money appropriated in the first year in this
article is available the second year. The
commissioner may shift or transfer money in
the second year in subdivisions 2, 3, 4, 5, 12,
13, and 14 to address high-priority housing
needs.
new text end

Sec. 3. new text begin LEGISLATIVE COORDINATING COMMISSION new text end

new text begin $ new text end

new text begin 200,000 new text end

new text begin $ new text end

new text begin -0- new text end

new text begin $200,000 in fiscal year 2026 is to provide
administrative support to the Task Force on
Homeowners and Commercial Property
Insurance established in article 2, section 13.
This is a onetime appropriation.
new text end

Sec. 4.

Laws 2023, chapter 37, article 1, section 2, subdivision 29, as amended by Laws
2024, chapter 127, article 14, section 11, is amended to read:

Subd. 29. Community Stabilization

45,000,000

deleted text begin 70,000,000 deleted text end new text begin 60,000,000 new text end

(a) This appropriation is for the community
stabilization program. This a onetime
appropriation.

(b) The first year and second year
appropriations are available as follows:

(1) $10,000,000 is for a grant to AEON for
Huntington Place;

(2) notwithstanding Minnesota Statutes,
sections 16B.98, subdivisions 5 and 12, and
16B.981, subdivision 2, $3,250,000 is for a
grant to the Wilder Park Association to assist
with the cost of a major capital repair project
for the rehabilitation of portions of the
owner-occupied senior high-rise facility. The
grantee must verify that 50 percent of units
are occupied by households with incomes at
or below 60 percent of area median income;

(3) $41,750,000 is for multiunit rental housing; new text begin
and
new text end

deleted text begin (4) $10,000,000 is for single-family housing;
and
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end $50,000,000 is for recapitalization of
distressed buildings. Of this amount, up to
$15,000,000 is for preservation or
recapitalization of housing that includes
supportive housing.

(c) Notwithstanding Minnesota Statutes,
section 16B.98, subdivision 14, the
commissioner may use up to one percent of
this appropriation for administrative costs for
the grants in paragraph (b), clauses (1) and
(2). This is a onetime appropriation.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5. new text begin TRANSFER; HOUSING SUPPORT ACCOUNT.
new text end

new text begin The commissioner of management and budget must transfer any unencumbered balance
from the housing support account under Minnesota Statutes, section 462A.43, to the general
fund by June 15, 2025.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2024, section 16A.287, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2024, section 462A.43, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective the day following final enactment.
new text end

ARTICLE 2

POLICY

Section 1.

Minnesota Statutes 2024, section 327C.095, subdivision 12, is amended to read:

Subd. 12.

Payment to the Minnesota manufactured home relocation trust fund.

(a)
If a manufactured home owner is required to move due to the conversion of all or a portion
of a manufactured home park to another use, the closure of a park, or cessation of use of
the land as a manufactured home park, the manufactured park owner shall, upon the change
in use, pay to the Minnesota Housing Finance Agency for deposit in the Minnesota
manufactured home relocation trust fund under section 462A.35, the lesser amount of the
actual costs of moving or purchasing the manufactured home approved by the neutral third
party and paid by the Minnesota Housing Finance Agency under subdivision 13, paragraph
(a) or (e), or $3,250 for each single section manufactured home, and $6,000 for each
multisection manufactured home, for which a manufactured home owner has made
application for payment of relocation costs under subdivision 13, paragraph (c). The
manufactured home park owner shall make payments required under this section to the
Minnesota manufactured home relocation trust fund within 60 days of receipt of invoice
from the neutral third party.

(b) A manufactured home park owner is not required to make the payment prescribed
under paragraph (a), nor is a manufactured home owner entitled to compensation under
subdivision 13, paragraph (a) or (e), if:

(1) the manufactured home park owner relocates the manufactured home owner to
another space in the manufactured home park or to another manufactured home park at the
park owner's expense;

(2) the manufactured home owner is vacating the premises and has informed the
manufactured home park owner or manager of this prior to the mailing date of the closure
statement under subdivision 1;

(3) a manufactured home owner has abandoned the manufactured home, or the
manufactured home owner is not current on the monthly lot rental, personal property taxes;

(4) the manufactured home owner has a pending eviction action for nonpayment of lot
rental amount under section 327C.09, which was filed against the manufactured home owner
prior to the mailing date of the closure statement under subdivision 1, and the writ of recovery
has been ordered by the district court;

(5) the conversion of all or a portion of a manufactured home park to another use, the
closure of a park, or cessation of use of the land as a manufactured home park is the result
of a taking or exercise of the power of eminent domain by a governmental entity or public
utility; or

(6) the owner of the manufactured home is not a resident of the manufactured home
park, as defined in section 327C.015, subdivision 14; the owner of the manufactured home
is a resident, but came to reside in the manufactured home park after the mailing date of
the closure statement under subdivision 1; or the owner of the manufactured home has not
paid the $15 assessment when due under paragraph (c).

(c) If the unencumbered fund balance in the manufactured home relocation trust fund
is less than $2,000,000 as of June 30 of each year, the Minnesota Housing Finance Agency
shall assess each manufactured home park owner by mail the total amount of $15 for each
licensed lot in their park, payable on or before December 15 of that year. Failure to notify
and timely assess the manufactured home park owner by July 31 of any year shall waive
the assessment and payment obligations of the manufactured home park owner for that year.
Together with said assessment notice, each year the Minnesota Housing Finance Agency
shall prepare and distribute to park owners a letter explaining whether funds are being
collected for that year, information about the collection, an invoice for all licensed lots, a
notice for distribution to the residents, and a sample form for the park owners to collect
information on which park residents and lots have been accounted for. new text begin The agency must
also include information in the letter about the tax credit available for sales of manufactured
home parks to cooperatives in section 290.0694 and about notice requirements for unsolicited
sales in section 327C.097. The agency may include additional information in the letter about
programs and resources available to manufactured home park residents and owners. new text end In a
font no smaller than 14-point, the notice provided by the Minnesota Housing Finance Agency
for distribution to residents by the park owner will include the payment deadline of October
31 and the following language: "THIS IS NOT AN OPTIONAL FEE. IF YOU OWN A
MANUFACTURED HOME ON A LOT YOU RENT IN A MANUFACTURED HOME
PARK, AND YOU RESIDE IN THAT HOME, YOU MUST PAY WHEN PROVIDED
NOTICE." If assessed under this paragraph, the park owner may recoup the cost of the $15
assessment as a lump sum or as a monthly fee of no more than $1.25 collected from park
residents together with monthly lot rent as provided in section 327C.03, subdivision 6. If,
by September 15, a park owner provides the notice to residents for the $15 lump sum, a
park owner may adjust payment for lots in their park that are vacant or otherwise not eligible
for contribution to the trust fund under section 327C.095, subdivision 12, paragraph (b),
and for park residents who have not paid the $15 assessment when due to the park owner
by October 31, and deduct from the assessment accordingly. The Minnesota Housing Finance
Agency shall deposit any payments in the Minnesota manufactured home relocation trust
fund and maintain an annual record for each manufactured home park of the amount received
for that park and the number of deductions made for each of the following reasons: vacant
lots, ineligible lots, and uncollected fees.

(d) This subdivision and subdivision 13, paragraph (c), clause (5), are enforceable by
the neutral third party, on behalf of the Minnesota Housing Finance Agency, or by action
in a court of appropriate jurisdiction. The court may award a prevailing party reasonable
attorney fees, court costs, and disbursements.

Sec. 2.

Minnesota Statutes 2024, section 462A.051, subdivision 2, is amended to read:

Subd. 2.

Application.

This section applies to all forms of financial assistance provided
by the Minnesota Housing Finance Agency, as well as the allocation and award of federal
low-income housing credits new text begin by all allocating agencies as defined under section 462A.221 new text end ,
for the development, construction, rehabilitation, renovation, or retrofitting of deleted text begin multiunit
residential deleted text end new text begin multifamily new text end housing, including loans, grants, tax credits, loan guarantees, loan
insurance, and other financial assistance.

Sec. 3.

Minnesota Statutes 2024, section 462A.07, subdivision 19, is amended to read:

Subd. 19.

Report to the legislature.

(a) By February 15 each year, the commissioner
must submit a report to the chairs and ranking minority members of the legislative committees
having jurisdiction over housing finance and policy containing the following information:

(1) the total number of applications for funding;

(2) the amount of funding requested;

(3) the amounts of funding awarded; and

(4) the number of housing units that are affected by funding awards, including the number
of:

(i) newly constructed owner-occupied units;

(ii) renovated owner-occupied units;

(iii) newly constructed rental units; and

(iv) renovated rental units.

(b) This reporting requirement applies to appropriations for competitive development
programs made in Laws 2023 and in subsequent laws.

new text begin (c) By January 5 each year, the commissioner must report on the financial stability of
the affordable housing industry. The report must include:
new text end

new text begin (1) the ratio of operating expenses to revenue in affordable rental housing projects; and
new text end

new text begin (2) the percent of rents collected on time, divided into four regions of the state:
new text end

new text begin (i) the cities of St. Paul and Minneapolis;
new text end

new text begin (ii) the metropolitan counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington, except for the cities of St. Paul and Minneapolis;
new text end

new text begin (iii) urban greater Minnesota, including the cities of Duluth, Mankato, Moorhead,
Rochester, and St. Cloud; and
new text end

new text begin (iv) rural greater Minnesota, which includes all of Minnesota except for the places listed
in items (i), (ii), and (iii).
new text end

Sec. 4.

Minnesota Statutes 2024, section 462A.07, is amended by adding a subdivision to
read:

new text begin Subd. 21. new text end

new text begin Affordable housing annual meeting. new text end

new text begin At least once each year, the
commissioner must convene a meeting with the Interagency Council to End Homelessness
and the cities and counties with high levels of cost-burdened households, meaning the cities
and counties where gross rent or homeownership costs are 30 percent or more of household
income. The purpose of the meeting is to discuss:
new text end

new text begin (1) resources received by cities and counties;
new text end

new text begin (2) regional needs for affordable housing; and
new text end

new text begin (3) recommendations for the collaborative use of funds to effectively address
homelessness, housing insecurity, security of affordable housing, and the lack of housing
supply.
new text end

Sec. 5.

Minnesota Statutes 2024, section 462A.2095, subdivision 3, is amended to read:

Subd. 3.

Grants to program administrators.

(a) The agency may make grants to
program administrators to provide rental assistance for eligible households. new text begin Notwithstanding
section 16C.06, the commissioner may use a formula to determine award amounts to program
administrators. new text end For both tenant-based and project-based assistance, program administrators
shall pay assistance directly to housing providers. Rental assistance may be provided in the
form of tenant-based assistance or project-based assistance. Notwithstanding the amounts
awarded under subdivision 1, paragraph (b), and to the extent practicable, the agency must
make grants statewide in proportion to the number of households eligible for assistance in
each county according to the most recent American Community Survey of the United States
Census Bureau. new text begin The agency may, at its discretion, redistribute unused or underutilized
money among eligible program administrators to increase program efficiency and
effectiveness.
new text end

(b) The program administrator may use its existing procedures to administer the rent
assistance program or may develop alternative procedures with the goals of reaching
households most in need and incentivizing landlord participation. The agency must approve
a program administrator's alternative procedures. Priority for rental assistance shall be given
to households with children 18 years of age and under, and annual incomes of up to 30
percent of the area median income. Program administrators may establish additional priority
populations based on local need.

Sec. 6.

Minnesota Statutes 2024, section 462A.33, subdivision 2, is amended to read:

Subd. 2.

Eligible recipients.

Challenge grants or loans may be made to a city deleted text begin , deleted text end new text begin ; new text end a federally
recognized American Indian Tribe or subdivision located in Minnesota deleted text begin , deleted text end new text begin ; new text end a Tribal housing
corporation deleted text begin , deleted text end new text begin ; new text end a private developer deleted text begin , deleted text end new text begin ; new text end a nonprofit organization deleted text begin , deleted text end new text begin ; new text end a school district deleted text begin , deleted text end new text begin ; new text end a cooperative
unit, as defined in section 123A.24, subdivision 2 deleted text begin , deleted text end new text begin ; new text end a charter school deleted text begin , deleted text end new text begin ; a contract alternative
school; a Tribal contract school; new text end or the owner of the housing, including individuals. For the
purpose of this section, "city" has the meaning given deleted text begin it deleted text end in section 462A.03, subdivision 21.
To the extent practicable, grants and loans shall be made so deleted text begin that deleted text end an approximately equal
number of housing units are financed in the metropolitan area and in the nonmetropolitan
area.

Sec. 7.

Minnesota Statutes 2024, section 462A.33, subdivision 9, is amended to read:

Subd. 9.

Grant funding to schools.

A school district; a cooperative unit, as defined in
section 123A.24, subdivision 2; deleted text begin or deleted text end a charter school new text begin ; a contract alternative school; or a Tribal
contract school new text end may receive funding under this section in the form of a grant less than
$100,000. A school district deleted text begin , deleted text end new text begin ; new text end intermediate district deleted text begin , or deleted text end new text begin ; new text end charter school new text begin ; contract alternative
school; or Tribal contract school new text end that uses a grant under this section to construct a home for
owner occupancy must require the future occupant to participate in the homeownership
education counseling and training program under section 462A.209.

Sec. 8.

Minnesota Statutes 2024, section 462A.40, subdivision 3, is amended to read:

Subd. 3.

Eligible recipients; definitions; restrictions; use of funds.

(a) The agency
may award a grant or a loan to any recipient that qualifies under subdivision 2. The agency
must not award a grant or a loan to a disqualified individual or disqualified business.

(b) For the purposes of this subdivision disqualified individual means:

(1) an individual who or an individual whose immediate family member made a
contribution to the account in the current or prior taxable year and received a credit certificate;

(2) an individual who or an individual whose immediate family member owns the housing
for which the grant or loan will be used;

(3) an individual who meets the following criteria:

(i) the individual is an officer or principal of a business entity; and

(ii) that business entity made a contribution to the account in the current or previous
taxable year and received a credit certificate; or

(4) an individual who meets the following criteria:

(i) the individual directly owns, controls, or holds the power to vote 20 percent or more
of the outstanding securities of a business entity; and

(ii) that business entity made a contribution to the account in the current or previous
taxable year and received a credit certificate.

(c) For the purposes of this subdivision disqualified business means a business entity
that:

(1) made a contribution to the account in the current or prior taxable year and received
a credit certificate;

(2) has an officer or principal who is an individual who made a contribution to the
account in the current or previous taxable year and received a credit certificate; or

(3) meets the following criteria:

(i) the business entity is directly owned, controlled, or is subject to the power to vote 20
percent or more of the outstanding securities by an individual or business entity; and

(ii) that controlling individual or business entity made a contribution to the account in
the current or previous taxable year and received a credit certificate.

(d) For purposes of this subdivision, "immediate family" means the taxpayer's spouse,
parent or parent's spouse, sibling or sibling's spouse, or child or child's spouse. For a married
couple filing a joint return, the limitations in this subdivision apply collectively to the
taxpayer and spouse.

new text begin (e) For purposes of this subdivision, "officer or principal" excludes an individual serving
as a volunteer board member of a nonprofit organization governed by chapter 317A.
new text end

deleted text begin (e) deleted text end new text begin (f) new text end Before applying for a grant or loan, all recipients must sign a disclosure that the
disqualifications under this subdivision do not apply. The Minnesota Housing Finance
Agency must prescribe the form of the disclosure. The Minnesota Housing Finance Agency
may rely on the disclosure to determine the eligibility of recipients under paragraph (a).

deleted text begin (f) deleted text end new text begin (g) new text end The agency may award grants or loans to a city as defined in section 462A.03,
subdivision 21; a federally recognized American Indian tribe or subdivision located in
Minnesota; a tribal housing corporation; a private developer; a nonprofit organization; a
housing and redevelopment authority under sections 469.001 to 469.047; a public housing
authority or agency authorized by law to exercise any of the powers granted by sections
469.001 to 469.047; or the owner of the housing. The provisions of subdivision 2, and
paragraphs (a) to deleted text begin (e) deleted text end new text begin (f) new text end and deleted text begin (g) deleted text end new text begin (h) new text end of this subdivision, regarding the use of funds and eligible
recipients apply to grants and loans awarded under this paragraph.

deleted text begin (g) deleted text end new text begin (h) Except for projects receiving funding under section 462A.39, new text end eligible recipients
must use the funds to serve households that meet the income limits as provided in section
462A.33, subdivision 5.

Sec. 9.

new text begin [462A.415] COMMUNITY-BASED FIRST-GENERATION HOMEBUYERS
DOWN PAYMENT ASSISTANCE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A community-based first-generation homebuyers down
payment assistance program is established as a noncompetitive program under the
administration of 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 homebuyers.
new text end

new text begin Subd. 2. new text end

new text begin Administration. new text end

new text begin The community-based first-generation homebuyers down
payment assistance program is available statewide and shall be administered by a designated
central CDFI. The administering CDFI may originate and service funds and authorize other
CDFIs, Tribal entities, and nonprofit organizations administering down payment assistance
to reserve, originate, fund, and service funds for eligible homebuyers. Administrative costs
must not exceed ten percent of the fiscal year appropriation.
new text end

new text begin Subd. 3. new text end

new text begin Eligible homebuyer. new text end

new text begin For purposes of this section, "eligible homebuyer" means
an adult person:
new text end

new text begin (1) whose income is at or below 100 percent of the statewide median income at the time
of application;
new text end

new text begin (2) who is preapproved for a first mortgage loan; and
new text end

new text begin (3)(i) who either never owned a home or who owned a home but lost it due to foreclosure;
and
new text end

new text begin (ii) whose parent or prior legal guardian either never owned a home or owned a home
but lost it due to foreclosure.
new text end

new text begin The eligible homebuyer must complete an approved homebuyer education course prior to
signing a purchase agreement and, following the purchase of the home, must occupy it as
their primary residence.
new text end

new text begin Subd. 4. 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 one unit or two unit home, not to exceed $32,000. Beginning in fiscal
year 2027, the maximum amount of assistance may be increased to up to ten percent of the
median home sales price as reported in the previous year's Minnesota Realtors Annual
Report on the Minnesota Housing Market. Funds are reserved at the issuance of preapproval.
Reservation of funds is not contingent on having an executed purchase agreement. The
assistance must be provided in the form of a no-interest loan that is forgiven over five years,
forgivable at a rate of 20 percent per year on the day after the anniversary date of the note,
with the final 20 percent forgiven on the down payment assistance loan maturity date. There
is no monthly pro rata or partial-year credit. The loan has no monthly payment and does
not accrue interest. 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. Recapture can be waived in the event of financial or personal hardship.
The administering CDFI may retain recaptured funds for assisting eligible homebuyers as
provided in this section. Funds may be used for closing costs, down payment, or principal
reduction. The eligible household may select any first mortgage lender or broker of their
choice, provided that the funds are used in conjunction with a conforming first mortgage
loan that is fully amortizing and meets the standards of a qualified mortgage or meets the
minimum standards for exemption under Code of Federal Regulations, title 12, section
1026.43. Funds may be used in conjunction with other programs the eligible household may
qualify for and the loan placed in any priority position.
new text end

new text begin Subd. 5. new text end

new text begin Report to legislature. new text end

new text begin By January 15 each year, the administering CDFI must
report to the chairs and ranking minority members of the legislative committees with
jurisdiction over housing finance and policy the following information:
new text end

new text begin (1) the number and amounts of loans closed;
new text end

new text begin (2) the median loan amount;
new text end

new text begin (3) the number and amounts of loans issued by race or ethnic categories;
new text end

new text begin (4) the median home purchase price;
new text end

new text begin (5) the interest rates and types of mortgages;
new text end

new text begin (6) the total amount returned to the fund; and
new text end

new text begin (7) the number and amounts of loans issued by county.
new text end

Sec. 10.

Laws 2023, chapter 37, article 1, section 2, subdivision 20, is amended to read:

Subd. 20. Community-Based First-Generation Homebuyers Down Payment Assistance

100,000,000

-0-

This appropriation is for a grant to Midwest
Minnesota Community Development
Corporation (MMCDC) to act as the
administrator of the community-based
first-generation homebuyers down payment
assistance program. The funds shall be
available to MMCDC for a three-year period
commencing with issuance of the funds to
MMCDC. At the expiration of that period, any
unused funds shall be remitted to the agency.
deleted text begin Any funds recaptured by MMCDC after the
expiration of that period shall be remitted to
the agency. deleted text end Funds remitted to the agency
under this paragraph are appropriated to the
agency for administration of the
first-generation homebuyers down payment
assistance fund.

Sec. 11.

Laws 2023, chapter 37, article 1, section 2, subdivision 21, is amended to read:

Subd. 21. Local Housing Trust Fund Grants

4,800,000

-0-

(a) This appropriation is for deposit in the
housing development fund for grants to local
housing trust funds established under
Minnesota Statutes, section 462C.16, to
incentivize local funding. This is a onetime
appropriation.

(b) A grantee is eligible to receive a grant
amount equal to 100 percent of the public
revenue committed to the local housing trust
fund from any source other than the state or
federal government, up to $150,000, and in
addition, an amount equal to 50 percent of the
public revenue committed to the local housing
trust fund from any source other than the state
or federal government that is more than
$150,000 but not more than $300,000.

(c) A grantee must use grant funds within deleted text begin eight deleted text end new text begin
five new text end years of receipt for purposes (1)
authorized under Minnesota Statutes, section
462C.16, subdivision 3, and (2) benefiting
households with incomes at or below 115
percent of the state median income. A grantee
must return any grant funds not used for these
purposes within eight years of receipt to the
commissioner of the Minnesota Housing
Finance Agency for deposit into the housing
development fund.

Sec. 12.

Laws 2023, chapter 37, article 2, section 10, is amended to read:

Sec. 10. HIGH-RISE SPRINKLER SYSTEM GRANT new text begin AND LOAN new text end PROGRAM.

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

(b) "Eligible building" means an existing residential building in which:

(1) deleted text begin at least one story used for human occupancy is deleted text end new text begin the building is seven stories or more
in height or new text end 75 feet or more above the lowest level of fire department vehicle access; and

(2) at least two-thirds of its units are affordable to households with an annual income at
or below deleted text begin 50 deleted text end new text begin 60 new text end percent of the area median income as determined by the United States
Department of Housing and Urban Development, adjusted for family size deleted text begin , that is paying
no more than 30 percent of annual income on rent deleted text end .

(c) "Sprinkler system" means the same as the term "fire protection system" as defined
in Minnesota Statutes, section 299M.01.

Subd. 2.

deleted text begin Grant program deleted text end new text begin Use of funds new text end .

The commissioner of the Housing Finance
Agency must make grants new text begin or loans new text end to owners of eligible buildings for installation of sprinkler
systems and, if necessary, for relocation of residents during the installation of sprinkler
systems. Priority shall be given to nonprofit applicants. The maximum grant per eligible
building shall be $2,000,000. Each grant to a nonprofit organization shall require a 25
percent match. Each grant to a for-profit organization shall require a 50 percent match.

Sec. 13. new text begin POLICY FRAMEWORK FOR TARGETED STABILIZATION OF
REGULATED AFFORDABLE HOUSING.
new text end

new text begin (a) The commissioner of the Housing Finance Agency must work with affordable housing
stakeholders, including the Interagency Stabilization Group, to develop a policy framework
for targeted stabilization of affordable rental housing. In developing this framework, the
commissioner must identify:
new text end

new text begin (1) strategies, tools, and funding mechanisms for targeted stabilization of affordable
rental housing and recapitalization of distressed properties;
new text end

new text begin (2) potential improvements for regulatory relief for affordable rental housing providers
and must implement these improvements where feasible;
new text end

new text begin (3) a specific plan for relief when an operator of permanent housing cannot identify and
secure adequate service funding that matches the tenants' needs; and
new text end

new text begin (4) a strategy with the commissioner of human services to integrate the awarding of state
service dollars to permanent supportive housing so that state service dollars can accompany
capital awards in the consolidated request for proposal process.
new text end

new text begin (b) The commissioner of the Housing Finance Agency must report quarterly to the
Minnesota Housing Finance Agency Board of Directors on the policy framework,
improvements implemented, and any potential changes to legislation that may be needed
to support targeted stabilization of regulated affordable housing and recapitalization of
distressed properties.
new text end

new text begin (c) By January 5, 2026, the commissioner of the Housing Finance Agency must report
to the chairs and ranking minority members of the legislative committees having jurisdiction
over housing finance and policy on the policy framework, improvements implemented, and
any potential changes to legislation that may be needed to support targeted stabilization of
regulated affordable housing and recapitalization of distressed properties.
new text end

Sec. 14. new text begin INTERAGENCY STABILIZATION GROUP.
new text end

new text begin The commissioner of the Housing Finance Agency may convene regular meetings of
public funders and affordable housing stakeholders to seek funding solutions that support
the preservation and stabilization of affordable properties.
new text end

Sec. 15. new text begin TASK FORCE ON HOMEOWNERS AND COMMERCIAL PROPERTY
INSURANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A task force is established to evaluate issues and provide
recommendations relating to insurance affordability of single-family housing, multifamily
rental housing, common interest communities, cooperatives, and small businesses and for
preventing disruptions or loss to the development, preservation, and long-term sustainability
of Minnesota's housing infrastructure and small businesses.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The task force consists of the following:
new text end

new text begin (1) one member appointed by the commissioner of commerce;
new text end

new text begin (2) one member appointed by the speaker of the house;
new text end

new text begin (3) one member appointed by the house minority leader;
new text end

new text begin (4) one member appointed by the senate majority leader;
new text end

new text begin (5) one member appointed by the senate minority leader;
new text end

new text begin (6) one member appointed by the Minnesota Consortium of Community Developers;
new text end

new text begin (7) one member appointed by the Insurance Federation of Minnesota;
new text end

new text begin (8) one member appointed by Big I Minnesota;
new text end

new text begin (9) one member appointed by the Minnesota Realtors;
new text end

new text begin (10) one member appointed by the Minnesota Community Development Financial
Institutions Coalition;
new text end

new text begin (11) one member appointed by the Minnesota Homeownership Center;
new text end

new text begin (12) one member appointed by the Housing Justice Center; and
new text end

new text begin (13) one member with climate science expertise.
new text end

new text begin (b) The appointing authorities must make the appointments by August 15, 2025.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin (a) The task force must identify recommendations to strengthen and
stabilize the homeowners and commercial property insurance industry.
new text end

new text begin (b) The task force must consult with the commissioner of the Housing Finance Agency,
the commissioner of employment and economic development, and key stakeholders in the
insurance and housing industries.
new text end

new text begin (c) The task force must review:
new text end

new text begin (1) risk mitigation and property resilience to natural hazards, and the effect on insurance
costs;
new text end

new text begin (2) liability laws impacting insurance costs;
new text end

new text begin (3) minimum notice for coverage changes, including enforcement and oversight;
new text end

new text begin (4) public reporting of aggregated data relating to insurance plan costs and coverage;
new text end

new text begin (5) the reinsurance market for homeowners and commercial property insurance;
new text end

new text begin (6) the current state-supported insurance program and the potential to expand the program
to include a catastrophic reinsurance fund and a self-insured pool;
new text end

new text begin (7) factors that increase claim costs, including but not limited to post-loss contractors,
fraudulent claims, climate, inflation, and discontinued building materials; and
new text end

new text begin (8) other areas that would strengthen and stabilize the homeowners and commercial
property insurance industry.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin The Legislative Coordinating Commission must provide
administrative support to the task force. Upon request of the task force, the commissioners
of commerce, the Housing Finance Agency, and employment and economic development
must provide technical support and expertise.
new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin (a) The Legislative Coordinating Commission must ensure the first
meeting of the task force convenes no later than September 15, 2025, and must provide
accessible physical or virtual meeting space as necessary for the task force to conduct work.
new text end

new text begin (b) At the first meeting, the task force must elect a chair or cochairs from those appointed
by the house and senate by a majority vote of those members present and may elect a
vice-chair as necessary.
new text end

new text begin (c) The task force must establish a schedule for meetings and must meet as necessary
to accomplish the duties under subdivision 3.
new text end

new text begin (d) The task force is subject to Minnesota Statutes, chapter 13D.
new text end

new text begin Subd. 6. new text end

new text begin Report required. new text end

new text begin (a) The task force must submit a report to the commissioners
of commerce, the Housing Finance Agency, and employment and economic development
and the chairs and ranking minority members of the legislative committees having jurisdiction
over the agencies listed in this paragraph by February 15, 2026.
new text end

new text begin (b) The report must:
new text end

new text begin (1) summarize the activities of the task force;
new text end

new text begin (2) provide findings and recommendations adopted by the task force;
new text end

new text begin (3) include any draft legislation required to implement recommendations; and
new text end

new text begin (4) include other information the task force believes is necessary to report.
new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin The task force expires upon submission of the report required
under subdivision 6.
new text end

new text begin EFFECTIVE DATE. new text end

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

APPENDIX

Repealed Minnesota Statutes: S2298-1

16A.287 TRANSFER; HOUSING SUPPORT.

In fiscal year 2025 and each year thereafter, the commissioner of management and budget must transfer $450,000 from the general fund to the housing support account, under section 462A.43.

462A.43 HOUSING SUPPORT ACCOUNT.

The commissioner of management and budget shall establish the housing support account in the special revenue fund for the deposit of certain funds provided by law. Money appropriated from the account by law must provide housing support for Minnesotans.