HF 2335

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/06/2023 04:24pm

A bill for an act
relating to state government; establishing a budget for the Minnesota Housing
Finance Agency; providing for childhood housing stability; establishing a
community stabilization program; establishing a supportive housing program;
establishing a first-generation homebuyers down payment assistance fund;
appropriating money; amending Minnesota Statutes 2022, sections 462A.201,
subdivision 2; 462A.204, subdivision 8; 462A.21, subdivision 3b; proposing coding
for new law in Minnesota Statutes, chapter 462A.

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

ARTICLE 1

HOUSING 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 "2024" and "2025" used in this article mean that the appropriations listed under them
are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively. "The
first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium" is
fiscal years 2024 and 2025.
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 2024 new text end		new text begin 2025 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 471,048,000 new text end

new text begin $ new text end

new text begin 371,048,000 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, this
appropriation is for transfer to the housing
development fund for the programs specified
in this section. Except as otherwise indicated,
this transfer is part of the agency's permanent
budget base.
new text end

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

new text begin 62,925,000 new text end

new text begin 62,925,000 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, $6,292,500 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 (c) The base for this program in fiscal year
2026 and beyond is $12,925,000.
new text end

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

new text begin 22,000,000 new text end

new text begin 22,000,000 new text end

new text begin (a) 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 (b) The base for this program in fiscal year
2026 and beyond is $2,000,000.
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 13,500,000 new text end

new text begin 13,500,000 new text end

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

new text begin (b) The base for this program in fiscal year
2026 and beyond is $1,000,000.
new text end

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

new text begin 17,750,000 new text end

new text begin 17,750,000 new text end

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

new text begin (b) The base for this program in fiscal year
2026 and beyond is $250,000.
new text end

new text begin Subd. 6. new text end new text begin Housing Trust Fund new text end

new text begin 16,646,000 new text end

new text begin 16,646,000 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. 7. new text end new text begin Homework Starts with Home new text end

new text begin 4,250,000 new text end

new text begin 4,250,000 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. 8. new text end new text begin Rental Assistance for Mentally Ill new text end

new text begin 9,338,000 new text end

new text begin 9,338,000 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. 9. new text end new text begin Family Homeless Prevention new text end

new text begin 60,269,000 new text end

new text begin 60,269,000 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,
the agency may award up to $10,000,000 in
fiscal year 2024 to existing grantees.
new text end

new text begin (c) Up to $5,000,000 in fiscal year 2024 is for
grants to eligible applicants to create or expand
risk mitigation programs to reduce landlord
financial risks for renting to persons eligible
under Minnesota Statutes, section 462A.204.
Eligible programs may reimburse landlords
for costs including but not limited to
nonpayment of rent, or damage costs above
those costs covered by security deposits. This
appropriation may be used for staffing costs
necessary to implement the program. The
agency may give priority to applicants that
demonstrate a matching amount of money by
a local unit of government, business, or
nonprofit organization. Grantees must
establish a procedure to review and validate
claims and reimbursements under this
program. This is a onetime appropriation.
new text end

new text begin (d) 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 (e) For fiscal year 2024 and fiscal year 2025,
qualified families may receive more than 24
months of rental assistance.
new text end

new text begin (f) If the agency determines that the
metropolitan area needs additional support to
serve homeless households or those at risk of
homelessness, the agency is authorized to
grant funds to entities other than counties in
the metropolitan area, including but not limited
to nonprofit organizations.
new text end

new text begin (g) 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 (h) Notwithstanding any law to the contrary,
$10,000,000 of this appropriation is allocated
to federally recognized American Indian
Tribes located in Minnesota. The funds shall
be divided equally among the Tribes and shall
be used for the purposes allowed under this
section.
new text end

new text begin (i) The base for this program in fiscal year
2026 and beyond is $14,519,000.
new text end

new text begin Subd. 10. new text end new text begin Home Ownership Assistance Fund new text end

new text begin 14,885,000 new text end

new text begin 14,885,000 new text end

new text begin (a) 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 (b) The base for this program in fiscal year
2026 and beyond is $4,885,000.
new text end

new text begin Subd. 11. 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. 12. 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. 13. 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. 14. new text end new text begin Homeownership Education, Counseling, and Training new text end

new text begin 1,857,000 new text end

new text begin 1,857,000 new text end

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

new text begin (b) The base for this program in fiscal year
2026 and beyond is $857,000.
new text end

new text begin Subd. 15. new text end new text begin Capacity-Building Grants new text end

new text begin 6,395,000 new text end

new text begin 6,395,000 new text end

new text begin (a) This appropriation is for capacity-building
grants under Minnesota Statutes, section
462A.21, subdivision 3b. Of this amount, up
to $125,000 each year is for support of the
Homeless Management Information System
(HMIS).
new text end

new text begin (b) The base for this program in fiscal year
2026 and beyond is $645,000.
new text end

new text begin Subd. 16. 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. 17. new text end new text begin Housing Infrastructure new text end

new text begin 50,000,000 new text end

new text begin 50,000,000 new text end

new text begin This appropriation is for the housing
infrastructure program for the eligible
purposes under Minnesota Statutes, section
462A.37, subdivision 2. This is a onetime
appropriation.
new text end

new text begin Subd. 18. new text end new text begin Public Housing Rehabilitation new text end

new text begin 10,000,000 new text end

new text begin 10,000,000 new text end

new text begin This appropriation is to finance the costs of
rehabilitation to preserve public housing under
Minnesota Statutes, section 462A.202,
subdivision 3a. For purposes of this section,
"public housing" means housing for
low-income persons and households that is
financed by the federal government and
publicly owned or housing that has been
repositioned under the federal Rental
Assistance Demonstration or similar program.
The agency may give priority to proposals that
maximize nonstate resources to finance the
capital costs, requests that prioritize long-term
affordability, and requests that prioritize
health, safety, and energy improvements. The
priority in Minnesota Statutes, section
462A.202, subdivision 3a, for projects to
increase the supply of affordable housing and
the restrictions of Minnesota Statutes, section
462A.202, subdivision 7, do not apply to this
appropriation. This is a onetime appropriation.
new text end

new text begin Subd. 19. new text end new text begin Community Stabilization new text end

new text begin 100,000,000 new text end

new text begin -0- new text end

new text begin This appropriation is for the community
stabilization program under Minnesota
Statutes, section 462A.41. This a onetime
appropriation.
new text end

new text begin Subd. 20. new text end new text begin Supportive Housing new text end

new text begin 20,000,000 new text end

new text begin 20,000,000 new text end

new text begin This appropriation is for the supportive
housing program under Minnesota Statutes,
section 462A.42. This is a onetime
appropriation.
new text end

new text begin Subd. 21. new text end new text begin First Generation Homebuyer new text end

new text begin 50,000,000 new text end

new text begin 50,000,000 new text end

new text begin This appropriation is for the first generation
homebuyer program under Minnesota Statutes,
section 462A.43. This is a onetime
appropriation.
new text end

new text begin Subd. 22. 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, 11,
12, and 13 to address high-priority housing
needs.
new text end

ARTICLE 2

HOUSING PROGRAM ELIGIBILITY

Section 1.

Minnesota Statutes 2022, section 462A.201, subdivision 2, is amended to read:

Subd. 2.

Low-income housing.

(a) The agency may use money from the housing trust
fund account to provide loans or grants for:

(1) projects for the development, construction, acquisition, preservation, and rehabilitation
of low-income rental and limited equity cooperative housing units, including temporary
and transitional housing;

(2) the costs of operating rental housing, as determined by the agency, that are unique
to the operation of low-income rental housing or supportive housing;

(3) rental assistance, either project-based or tenant-based; and

(4) programs to secure stable housing for families with new text begin minor children or with new text end children
eligible for enrollment in a prekindergarten through grade 12 academic program.

For purposes of this section, "transitional housing" has the meaning given by the United
States Department of Housing and Urban Development. Loans or grants for residential
housing for migrant farmworkers may be made under this section.

(b) The housing trust fund account must be used for the benefit of persons and families
whose income, at the time of initial occupancy, does not exceed 60 percent of median income
as determined by the United States Department of Housing and Urban Development for the
metropolitan area. At least 75 percent of the funds in the housing trust fund account must
be used for the benefit of persons and families whose income, at the time of initial occupancy,
does not exceed 30 percent of the median family income for the metropolitan area as defined
in section 473.121, subdivision 2. For purposes of this section, a household with a housing
assistance voucher under Section 8 of the United States Housing Act of 1937, as amended,
is deemed to meet the income requirements of this section.

The median family income may be adjusted for families of five or more.

(c) Rental assistance under this section must be provided by governmental units which
administer housing assistance supplements or by for-profit or nonprofit organizations
experienced in housing management. Rental assistance shall be limited to households whose
income at the time of initial receipt of rental assistance does not exceed 60 percent of median
income, as determined by the United States Department of Housing and Urban Development
for the metropolitan area. Priority among comparable applications for tenant-based rental
assistance will be given to proposals that will serve households whose income at the time
of initial application for rental assistance does not exceed 30 percent of median income, as
determined by the United States Department of Housing and Urban Development for the
metropolitan area. Rental assistance must be terminated when it is determined that 30 percent
of a household's monthly income for four consecutive months equals or exceeds the market
rent for the unit in which the household resides plus utilities for which the tenant is
responsible. Rental assistance may only be used for rental housing units that meet the housing
maintenance code of the local unit of government in which the unit is located, if such a code
has been adopted, or the housing quality standards adopted by the United States Department
of Housing and Urban Development, if no local housing maintenance code has been adopted.

(d) In making the loans or grants, the agency shall determine the terms and conditions
of repayment and the appropriate security, if any, should repayment be required. To promote
the geographic distribution of grants and loans, the agency may designate a portion of the
grant or loan awards to be set aside for projects located in specified congressional districts
or other geographical regions specified by the agency. The agency may adopt rules for
awarding grants and loans under this subdivision.

Sec. 2.

Minnesota Statutes 2022, section 462A.204, subdivision 8, is amended to read:

Subd. 8.

deleted text begin School deleted text end new text begin Childhood housing new text end stability.

(a) The agency in consultation with the
Interagency Council on Homelessness may establish a deleted text begin school deleted text end new text begin childhood housing new text end stability
project under the family homeless prevention and assistance program. The purpose of the
project is to secure stable housing for families with deleted text begin school-age deleted text end new text begin minor new text end children new text begin or with
children eligible for enrollment in a prekindergarten through grade 12 academic program
new text end who have moved frequently and for unaccompanied youth. For purposes of this subdivision,
"unaccompanied youth" are minors who are leaving foster care or juvenile correctional
facilities, or minors who meet the definition of a child in need of services or protection
under section 260C.007, subdivision 6, but for whom no court finding has been made
pursuant to that statute.

(b) The agency shall make grants to family homeless prevention and assistance projects
in communities with new text begin : (1) new text end a school or schools that have a significant degree of student
mobility new text begin ; (2) a significant degree of homelessness among families with minor children; or
(3) children eligible for enrollment in a prekindergarten through grade 12 academic program new text end .

(c) Each project must be designed to reduce school absenteeism; stabilize children in
one home setting or, at a minimum, in one school setting; and reduce shelter usage. Each
project must include plans for the following:

(1) targeting of families with new text begin minor children or with new text end children deleted text begin who are deleted text end eligible for new text begin
enrollment in new text end a prekindergarten through grade 12 academic program deleted text begin and deleted text end new text begin who new text end are living in
overcrowded conditions in their current housing; are paying more than 50 percent of their
income for rent; or deleted text begin who deleted text end lack a fixed, regular, and adequate nighttime residence;

(2) targeting of unaccompanied youth in need of an alternative residential setting;

(3) connecting families with the social services necessary to maintain the families'
stability in their home, including but not limited to housing navigation, legal representation,
and family outreach; and

(4) one or more of the following:

(i) provision of rental assistance for a specified period of time, which may exceed 24
months; or

(ii) provision of support and case management services to improve housing stability,
including but not limited to housing navigation and family outreach.

(d) In selecting projects for funding under this subdivision, preference shall be given to
organizations granted funding under section 462A.201, subdivision 2, paragraph (a), clause
(4).

(e) No grantee under this subdivision is required to have an advisory committee as
described in subdivision 6.

Sec. 3.

Minnesota Statutes 2022, section 462A.21, subdivision 3b, is amended to read:

Subd. 3b.

Capacity building grants.

It may make capacity building grants to nonprofit
organizations, local government units, Indian tribes, and Indian tribal organizations to
expand their capacity to provide affordable housing and housing-related services. The grants
may be used to assess housing needs and to develop and implement strategies to meet those
needs, including new text begin but not limited to new text end the creation or preservation of affordable housing,
prepurchase and postpurchase counseling and associated administrative costs, and the linking
of supportive services to the housing. The agency shall adopt rules new text begin , policies, and procedures new text end
specifying the eligible uses of grant money. Funding priority deleted text begin must deleted text end new text begin may new text end be given to those
applicants that include low-income persons in their membership, have provided
housing-related services to low-income people, and demonstrate a local commitment of
local resources, which may include in-kind contributions. deleted text begin Grants under this subdivision
may be made only with specific appropriations by the legislature.
deleted text end

Sec. 4.

new text begin [462A.41] COMMUNITY STABILIZATION PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The agency shall establish a community stabilization
program to provide grants or loans to preserve naturally occurring affordable housing through
acquisition, acquisition and rehabilitation, or rehabilitation.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, "naturally occurring affordable
housing" means:
new text end

new text begin (1) multiunit rental housing that:
new text end

new text begin (i) is at least 20 years old; and
new text end

new text begin (ii) has rents in a majority of units that are affordable to households at or below 60
percent of the greater of state or area median income as determined by the United States
Department of Housing and Urban Development; or
new text end

new text begin (2) owner-occupied housing located in communities where market pressures or significant
deferred rehabilitation needs, as defined by the agency, are creating opportunities for
displacement or the loss of owner-occupied housing affordable to households at or below
115 percent of the greater of state or area median income as determined by the United States
Department of Housing and Urban Development.
new text end

new text begin Subd. 3. new text end

new text begin Eligible recipients. new text end

new text begin (a) Grants or loans may be made to a local unit of
government; federally recognized American Indian Tribe located in Minnesota or its Tribally
Designated Housing Entity; private developer; limited equity cooperative; cooperative
created under chapter 308A or 308B; community land trust created for the purposes outlined
in section 462A.31, subdivision 1; or nonprofit organization.
new text end

new text begin (b) The agency may make a grant to a statewide intermediary to facilitate the acquisition
and associated rehabilitation of existing multiunit rental housing and may use an intermediary
or intermediaries for the acquisition and associated rehabilitation of owner-occupied housing.
new text end

new text begin Subd. 4. new text end

new text begin Eligible uses. new text end

new text begin The program shall provide grants or loans for the purpose of
acquisition, rehabilitation, interest rate reduction, or gap financing of housing to support
the preservation of naturally occurring affordable housing. Priority in funding shall be given
to proposals that serve lower incomes and maintain longer periods of affordability.
new text end

new text begin Subd. 5. new text end

new text begin Owner-occupied housing income limits. new text end

new text begin Households served through grants
or loans related to owner-occupied housing must have, at initial occupancy, income that is
at or below 115 percent of the greater of state or area median income as determined by the
United States Department of Housing and Urban Development.
new text end

new text begin Subd. 6. new text end

new text begin Multifamily housing rent limits. new text end

new text begin Multifamily housing financed through grants
or loans under this section must remain affordable to low-income or moderate-income
households as defined by the agency.
new text end

new text begin Subd. 7. new text end

new text begin Application. new text end

new text begin (a) The agency shall develop forms and procedures for soliciting
and reviewing applications for loans or grants under this section. The agency shall consult
with interested stakeholders when developing the guidelines and procedures for the program.
new text end

new text begin (b) Notwithstanding any other applicable law, the agency may accept applications on a
noncompetitive, rolling basis in order to provide funds for eligible properties as they become
available.
new text end

new text begin Subd. 8. new text end

new text begin Voucher requirement for multifamily properties. new text end

new text begin Rental properties that
receive funds must accept rental subsidies, including but not limited to vouchers under
Section 8 of the United States Housing Act of 1937, as amended.
new text end

Sec. 5.

new text begin [462A.42] SUPPORTIVE HOUSING PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The agency shall establish a supportive housing program
to provide funding to support the operations of supportive housing for individuals and
families who are at risk of homelessness or have experienced homelessness.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "supportive housing" means housing
that is not time-limited and provides or coordinates with services necessary for residents to
maintain housing stability and maximize opportunities for education and employment.
new text end

new text begin Subd. 3. new text end

new text begin Eligible recipients. new text end

new text begin Funding may be made to a local unit of government, a
federally recognized American Indian Tribe or its Tribally Designated Housing Entity
located in Minnesota, a private developer, or a nonprofit organization.
new text end

new text begin Subd. 4. new text end

new text begin Eligible uses. new text end

new text begin (a) Funds shall be used to cover costs needed for supportive
housing to operate effectively. Costs may include but are not limited to building operating
expenses such as front desk, tenant service coordination, revenue shortfall, and security
costs. These funds may be capitalized as part of development costs. Funds can be provided
to support existing permanent supportive housing units or to cover costs associated with
new permanent supportive housing units.
new text end

new text begin (b) Funds may be used to create partnerships with the health care sector and other sectors
to demonstrate sustainable ways to provide services for supportive housing residents, improve
access to health care, and reduce the use of expensive emergency and institutional care.
This may be done in partnership with other state agencies, including the Department of
Health and the Department of Human Services.
new text end

new text begin Subd. 5. new text end

new text begin Application. new text end

new text begin The commissioner shall develop forms and procedures for soliciting
and reviewing applications for funding under this section. The commissioner shall consult
with interested stakeholders when developing the guidelines and procedures for the program.
new text end

Sec. 6.

new text begin [462A.43] FIRST-GENERATION HOMEBUYERS DOWN PAYMENT
ASSISTANCE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A first-generation homebuyers down payment assistance
fund is established for the agency to provide targeted assistance to eligible first-generation
homebuyer households throughout the state. The agency shall partner with community
organizations, including community development financial institutions, credit unions, other
financial institutions, nonprofits, government entities, or federally recognized American
Indian Tribes or their Tribally Designated Housing Entities, to deliver the assistance.
new text end

new text begin Subd. 2. new text end

new text begin Eligible homebuyer. new text end

new text begin (a) For purposes of this section, "eligible first-generation
homebuyer" means an individual:
new text end

new text begin (1) whose household income is at or below 115 percent of the statewide or area median
income, whichever is greater, at the time of purchase;
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new text begin (2) who is a first-time homebuyer as defined by the agency;
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new text begin (3) who meets the following criteria:
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new text begin (i) has either never owned a home or owned a home but lost it due to foreclosure; and
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new text begin (ii) has a parent or prior legal guardian who does not currently own a home and had
never previously owned a home or had previously owned a home but lost it due to
foreclosure;
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new text begin (4) who completes an approved homebuyer education course; and
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new text begin (5) who plans on occupying the home as a primary residence.
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new text begin (b) An eligible homebuyer must purchase the home within the maximum loan amount
established by the Federal Housing Administration for the county in which the home is
located and must contribute a minimum of $1,000 toward 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 may be provided as a forgivable
loan, a deferred loan, or a combination of both. Homebuyers may use the funds to purchase
a one- to four-unit home, including manufactured homes. The assistance is limited to the
greater of ten percent of the purchase price of a home or $35,000 per eligible first-generation
homebuyer household. The amount of assistance shall be adjusted for market conditions
over time at the discretion of the agency. The funds may be used for one or more of the
following: closing costs, down payment, mortgage insurance, interest rate buy-down, and
principal reduction. The funds can be combined with other homebuyer assistance and must
be used in conjunction with a conforming first mortgage loan that is fully amortizing, with
or without interest, and meets the standard of a qualified mortgage or as otherwise determined
by the agency.
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new text begin Subd. 4. new text end

new text begin Repayment. new text end

new text begin Loans would be 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 for other reasons as stated in the loan documents. Recapture can be
waived in the event of financial or personal hardship at the discretion of the agency.
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new text begin Subd. 5. new text end

new text begin Administration. new text end

new text begin The first-generation homebuyers down payment assistance
fund is available statewide and shall be administered by the agency. If the agency works
with a lending partner, that partner may use a percentage of the funds received for
administrative fees as determined by the agency.
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