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HF 4269

as introduced - 92nd Legislature (2021 - 2022) Posted on 05/03/2022 05:25pm

KEY: stricken = removed, old language.
underscored = added, new language.
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3.18

A bill for an act
relating to housing; establishing a first-generation homebuyers down payment
assistance fund under the administration of a central community development
financial institution; requiring a report; appropriating money.

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

Section 1. new text beginFIRST-GENERATION HOMEBUYERS DOWN PAYMENT
ASSISTANCE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $170,000,000 in fiscal year 2023 is appropriated from
the general fund to the Housing Finance Agency as fiscal agent for a grant to Midwest
Minnesota Community Development Corporation (MMCDC) for purposes of this section.
The Housing Finance Agency must release grant funds to MMCDC as needed, and may do
so in tranches for administrative efficiency.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin A first-generation homebuyers down payment assistance fund
is established as a pilot project under the administration of the MMCDC, 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 first-generation homebuyers.
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 first-generation
homebuyer" means an individual:
new text end

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

new text begin (2) who is a first-time homebuyer as defined under Code of Federal Regulations, title
24, section 92.2;
new text end

new text begin (3) who is preapproved for a first mortgage loan; and
new text end

new text begin (4) whose parent or prior legal guardian does not, or did not at the time of their death,
own a home.
new text end

new text begin An 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. The home must be purchased within the maximum loan amount
established by the federal Housing Finance Agency, and the eligible homebuyer must
contribute a minimum of $1,000 to down payment or closing costs.
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 home, not to exceed $30,000 per eligible first-generation homebuyer.
The assistance must be provided in the form of a loan that is forgivable at a rate of 20 percent
per year on the day after the anniversary date of the note. 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. Funds may be reserved and used for closing costs, down
payment, or principal reduction. The funds must be 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
homebuyer 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 Administration. new text end

new text begin The first-generation homebuyers down payment assistance
fund is available statewide and shall be administered by MMCDC, the designated central
CDFI. MMCDC 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 first-generation homebuyers. Administrative costs must
not exceed $3,000 per loan. Any funds made available due to early resale of a home must
be returned to MMCDC for redistribution to eligible first-generation homebuyers.
new text end

new text begin Subd. 6. new text end

new text begin Legislative auditor. new text end

new text begin The first-generation homebuyers down payment assistance
fund is subject to audit by the legislative auditor. MMCDC and participating CDFIs must
cooperate with the audit.
new text end

new text begin Subd. 7. new text end

new text begin Creditor immunity for reliance on borrower self-attestations. new text end

new text begin No creditor
shall be subject to liability, including monetary penalties or requirements to indemnify a
federal or state agency or repurchase a loan that has been sold or securitized, for the provision
of down payment assistance under this section to a borrower who does not meet the eligibility
requirements if the creditor does so in good faith reliance on borrower attestations of
eligibility required by this section or regulation.
new text end

new text begin Subd. 8. new text end

new text begin Report to legislature. new text end

new text begin By January 15 each year, the fund administrator,
MMCDC, must report to the chairs and ranking minority members of the legislative
committees having jurisdiction over housing the following information:
new text end

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

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

new text begin (3) the number and amount 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 type of mortgage;
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 amount of loans issued by county.
new text end

new text begin Subd. 9. new text end

new text begin Sunset. new text end

new text begin This section sunsets July 1, 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2022.
new text end