HF 2148

as introduced - 94th Legislature (2025 - 2026) Posted on 03/10/2025 02:46pm

A bill for an act
relating to housing; establishing a locally controlled housing fund; requiring a
report; appropriating money; proposing coding for new law in Minnesota Statutes,
chapter 462A.

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

Section 1.

new text begin [462A.44] LOCALLY CONTROLLED HOUSING FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The locally controlled housing fund is established as a
separate account in the housing development fund. The agency may use the money from
the locally controlled housing fund to assist eligible recipients with acquiring, rehabilitating,
demolishing, or removing existing structures and constructing new housing and for
construction financing, permanent financing, interest rate reduction, refinancing, and gap
financing of housing to increase the amount of an eligible recipient's locally controlled
housing stock.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Approved partner" means a nonprofit organization or a housing cooperative that
meets all applicable requirements of the agency.
new text end

new text begin (c) "City" has the meaning given in section 462C.02, subdivision 6.
new text end

new text begin (d) "Community land trust" has the meaning given in section 462A.30, subdivision 8.
new text end

new text begin (e) "Eligible household" means a household whose income, at the time of application
or initial lease agreement, does not exceed 400 percent of area median income as published
by the Department of Housing and Urban Development, as adjusted for household size.
new text end

new text begin (f) "Eligible recipient" means a city, county, federally recognized American Indian Tribe
or subdivision located in Minnesota, Tribal housing corporation, community land trust, or
local housing authority.
new text end

new text begin (g) "Locally controlled housing" means:
new text end

new text begin (1) any multifamily or single-family property where the eligible recipient has at least a
75 percent controlling stake in ownership of the entire property and the remaining interest
is owned by an approved partner; or
new text end

new text begin (2) any multifamily or single-family property where an approved partner owns the
building and the eligible recipient owns the land.
new text end

new text begin Subd. 3. new text end

new text begin Eligible recipient requirements. new text end

new text begin (a) Eligible recipients may operate and
manage locally controlled housing or may contract with a third party approved by the agency.
new text end

new text begin (b) Upon repayment to the locally controlled housing fund of an amount equal to the
initial award, an eligible recipient may retain, reinvest, or otherwise use proceeds from
housing financed by the locally controlled housing fund to further the goals of affordable
housing production or acquisition in the recipient's jurisdiction.
new text end

new text begin Subd. 4. new text end

new text begin Fund requirements and applications. new text end

new text begin (a) To the extent practicable:
new text end

new text begin (1) the agency must make funding available so that an approximately equal number of
housing units are financed in the metropolitan area and in the nonmetropolitan area; and
new text end

new text begin (2) the agency must fund projects that include accessible units, as defined in section
1002 of the most recent State Building Code Accessibility Provisions for Dwelling Units
in Minnesota.
new text end

new text begin (b) In multifamily properties financed under this section, at least 30 percent of the units
must be occupied by households whose income at the time of application or initial lease
agreement does not exceed 50 percent of the area median income as published by the
Department of Housing and Urban Development, as adjusted for household size, and at
least 30 percent of the units must be occupied by households whose income, at the time of
application or initial lease agreement, exceeds 50 percent but does not exceed 100 percent
of the area median income as published by the Department of Housing and Urban
Development, as adjusted for household size. The agency may approve alternative rent and
income limits.
new text end

new text begin (c) Applications for funding must include a housing needs assessment that identifies the
estimated range of affordability for each project.
new text end

new text begin Subd. 5. new text end

new text begin Use of funds. new text end

new text begin The agency shall establish the locally controlled housing fund
as a revolving loan fund to make loans to eligible recipients for financing the acquisition,
rehabilitation, adaptive reuse, or new construction of locally controlled housing. Locally
controlled housing financed in part or whole through the locally controlled housing fund
must meet the following requirements:
new text end

new text begin (1) all housing must meet applicable accessibility requirements;
new text end

new text begin (2) no feature of the housing, including the design, construction, or location, may have
the effect of segregating or otherwise separating residents based on income level or the
amount of rent paid;
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new text begin (3) eligible recipients must maximize the affordability of rental units in locally controlled
housing based on the housing needs identified by the recipient in its application for assistance
under this section;
new text end

new text begin (4) for single-family homes, locally controlled housing must be occupied by households
with incomes at or below 50 percent of the area median income for the applicable county
or metropolitan area as published by the Department of Housing and Urban Development,
as adjusted for household size; and
new text end

new text begin (5) lease agreements signed with eligible households must include all applicable tenant
protections included in public housing lease agreements.
new text end

new text begin Subd. 6. new text end

new text begin Sale of locally controlled housing. new text end

new text begin (a) An eligible recipient must not sell its
ownership stake of locally controlled housing financed with money from this section unless
approved by the agency.
new text end

new text begin (b) Upon sale of its ownership stake, an eligible recipient must repay the locally controlled
housing fund any outstanding balance.
new text end

new text begin Subd. 7. new text end

new text begin Administration. new text end

new text begin The agency must employ at least one full-time equivalent
staff to serve as the director of the locally controlled housing fund. The director of the fund
shall work with eligible recipients to ensure compliance with all requirements under this
section and provide outreach to new eligible recipients.
new text end

new text begin Subd. 8. new text end

new text begin Annual reports. new text end

new text begin Beginning January 15, 2026, the commissioner must annually
submit a report to the chairs and ranking minority members of the legislative committees
with jurisdiction over housing specifying the projects that receive funding under this section
and the specific purposes for which the money was spent.
new text end

Sec. 2. new text begin APPROPRIATION; LOCALLY CONTROLLED HOUSING FUND.
new text end

new text begin $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
the Housing Finance Agency to create, fund, and administer a locally controlled housing
fund under Minnesota Statutes, section 462A.44.
new text end