HF 3593

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/15/2024 10:37am

A bill for an act
relating to housing; establishing a down payment assistance program for the
purchase of cooperative housing; establishing an affordable housing cooperative
technical assistance program; requiring reports; appropriating money.

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

Section 1. new text begin AFFORDABLE HOMEOWNERSHIP COOPERATIVE SHARE
ASSISTANCE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Eligible purchaser. new text end

new text begin For the purposes of this section, "eligible purchaser"
means an individual:
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new text begin (1) whose income is at or below 115 percent of the area median income at the time of
purchase; and
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new text begin (2) either (i) the individual never owned a home or owned a home but lost the home due
to foreclosure, or (ii) the individual's parent or prior legal guardian never owned a home or
owned a home but lost the home due to foreclosure.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin An affordable homeownership cooperative share assistance
fund is established to provide targeted assistance to eligible purchasers to buy cooperative
housing units. The Housing Finance Agency may 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. 3. new text end

new text begin Use of money. new text end

new text begin Assistance under this section is limited to 50 percent of the
purchase price of a cooperative housing unit, not to exceed $25,000 per eligible purchaser.
The assistance must be provided in the form of a fee-based loan that is forgivable at a rate
of 20 percent per year on the day after the anniversary date of the note. The loan 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 ten years. Recapture may be waived in the event of financial or
personal hardship. Money may be reserved and used for closing costs, down payment, or
principal reduction. The money must be used in conjunction with a conforming financing.
Money may be used in conjunction with other programs the eligible purchaser may qualify
for and the loan placed in any priority position. Eligible purchasers must participate in a
cooperative onboarding training and agree to occupy any unit purchased with assistance
under this section for ten years. Any recaptured money must be returned to the Minnesota
Housing Finance Agency for redistribution to eligible share-purchasers.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin The affordable housing share-purchasing assistance fund is
available statewide and must be administered by the Housing Finance Agency. Grantees
may use up to ten percent of the amount of a loan for administrative expenses.
new text end

new text begin Subd. 5. new text end

new text begin Legislative audit. new text end

new text begin The affordable housing cooperative share-purchasing fund
is subject to audit by the legislative auditor. The Housing Finance Agency and grantees
must cooperate with the audit.
new text end

new text begin Subd. 6. new text end

new text begin Report to legislature. new text end

new text begin By January 15 each year, the agency must report to the
chairs and ranking minority members of the legislative committees having jurisdiction over
housing the following information:
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new text begin (1) the number and amount of loans closed;
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new text begin (2) the average cost of a purchased cooperative housing unit;
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new text begin (3) the number and amount of loans issued by race and ethnic categories;
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new text begin (4) the average loan amount;
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new text begin (5) the total amount returned to the fund;
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new text begin (6) the average income of eligible purchasers; and
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new text begin (7) the number and amount of money issued by county.
new text end

Sec. 2. new text begin AFFORDABLE HOUSING COOPERATIVE TECHNICAL ASSISTANCE
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
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new text begin (1) "commissioner" means the commissioner of the Housing Finance Agency;
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new text begin (2) "eligible housing cooperative" means an entity that:
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new text begin (i) has a cooperatively run board of directors or is in the process of establishing a
cooperatively run board of directors; and
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new text begin (ii) provides housing to low- or moderate-income households; and
new text end

new text begin (3) "eligible partner organization" means a nonprofit organization or community
development financial institution based in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin The commissioner shall establish an affordable housing
cooperative technical assistance program to award grants statewide to eligible partner
organizations to support the start-up, growth, conversion, and ongoing provision of eligible
affordable housing cooperatives through the delivery of high-quality free technical assistance
services.
new text end

new text begin Subd. 3. new text end

new text begin Grants to eligible partner organizations; use of money. new text end

new text begin (a) The commissioner
shall develop forms and procedures for soliciting and reviewing applications for funding
under this section. Grantees may award subgrants and may use up to 15 percent of the grant
for administrative expenses. All grants must be for two years. The commissioner shall
prioritize grant awards to eligible partner organizations that:
new text end

new text begin (1) have a record of serving historically underserved communities and have a record of
establishing or supporting the growth of affordable housing cooperatives; and
new text end

new text begin (2) have a detailed proposal outlining steps to build expertise in supporting the
development of affordable housing cooperatives.
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new text begin (b) Grantees must target technical assistance to serve:
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new text begin (1) individuals who are Black, Indigenous, or people of color;
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new text begin (2) women;
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new text begin (3) immigrants;
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new text begin (4) veterans;
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new text begin (5) people who are LGBTQ+; and
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new text begin (6) people with disabilities.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin The commissioner may use up to five percent of the money
appropriated for the program for administering and monitoring the program.
new text end

new text begin Subd. 5. new text end

new text begin Reporting. new text end

new text begin (a) Grantees must report to the commissioner annually until grants
are expended or returned to the commissioner. A grantee's annual report must describe the
use of grant money and must include data on the number of affordable housing cooperatives
served and any other information requested by the commissioner.
new text end

new text begin (b) By January 15, 2026, and by January 15 each odd-numbered year thereafter, the
commissioner shall submit a report to the chairs and ranking minority members of the
committees of the house of representatives and the senate having jurisdiction over housing.
The report must detail the use of program money and the program's impact on underserved
communities.
new text end

Sec. 3. new text begin APPROPRIATION; AFFORDABLE HOUSING COOPERATIVE
TECHNICAL ASSISTANCE PROGRAM.
new text end

new text begin $5,000,000 in fiscal year 2025 is appropriated from the general fund to the commissioner
of the Housing Finance Agency for the housing cooperative technical assistance program.
The base amount for this appropriation in fiscal year 2026 and thereafter is $5,000,000.
new text end

Sec. 4. new text begin APPROPRIATION; AFFORDABLE HOMEOWNERSHIP COOPERATIVE
SHARE ASSISTANCE FUND.
new text end

new text begin $25,000,000 in fiscal year 2025 is appropriated from the general fund to the commissioner
of the Minnesota Housing Finance Agency for the affordable homeownership cooperative
share assistance fund. This appropriation is onetime and available until June 30, 2030.
new text end