SF 4804

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/22/2024 09:26am

A bill for an act
relating to housing; modifying housing provisions; amending Minnesota Statutes
2022, sections 462A.02, subdivision 10; 462A.05, subdivisions 14a, 14b, 15, 15b,
21, 23; 462A.21, subdivision 7; Minnesota Statutes 2023 Supplement, section
462A.05, subdivision 14.

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

Section 1.

Minnesota Statutes 2022, section 462A.02, subdivision 10, is amended to read:

Subd. 10.

Energy deleted text begin conservation deleted text end new text begin decarbonization and climate resilience new text end .

It is further
declared that supplies of conventional energy resources are rapidly depleting in quantity
and rising in price and that the burden of these occurrences falls heavily upon the citizens
of Minnesota generally and persons of low and moderate income in particular. These
conditions are adverse to the health, welfare, and safety of all of the citizens of this state.
It is further declared that it is a public purpose to ensure the availability of financing to be
used by all citizens of the state, while giving preference to low and moderate income people,
to assist in the installation in their dwellings of reasonably priced energy conserving systems
including the use of alternative energy resources and equipment so that by the improvement
of the energy efficiency deleted text begin of deleted text end new text begin , clean energy, greenhouse gas emissions reduction, climate
resiliency, and other qualified projects for new text end all housing, the adequacy of the total energy
supply may be preserved for the benefit of all citizens.

Sec. 2.

Minnesota Statutes 2023 Supplement, section 462A.05, subdivision 14, is amended
to read:

Subd. 14.

Rehabilitation loans.

It may agree to purchase, make, or otherwise participate
in the making, and may enter into commitments for the purchase, making, or participation
in the making, of eligible loans for rehabilitation, with terms and conditions as the agency
deems advisable, to persons and families of low and moderate income, and to owners of
existing residential housing for occupancy by such persons and families, for the rehabilitation
of existing residential housing owned by them. Rehabilitation may include the addition or
rehabilitation of a detached accessory dwelling unit. The loans may be insured or uninsured
and may be made with security, or may be unsecured, as the agency deems advisable. The
loans may be in addition to or in combination with long-term eligible mortgage loans under
subdivision 3. They may be made in amounts sufficient to refinance existing indebtedness
secured by the property, if refinancing is determined by the agency to be necessary to permit
the owner to meet the owner's housing cost without expending an unreasonable portion of
the owner's income thereon. No loan for rehabilitation shall be made unless the agency
determines that the loan will be used primarily to make the housing more desirable to live
in, to increase the market value of the housing, for compliance with state, county or municipal
building, housing maintenance, fire, health or similar codes and standards applicable to
housing, or to accomplish energy deleted text begin conservation related improvements deleted text end new text begin decarbonization,
climate resiliency, and other qualified projects new text end . In unincorporated areas and municipalities
not having codes and standards, the agency may, solely for the purpose of administering
the provisions of this chapter, establish codes and standards. No loan under this subdivision
for the rehabilitation of owner-occupied housing shall be denied solely because the loan
will not be used for placing the owner-occupied residential housing in full compliance with
all state, county, or municipal building, housing maintenance, fire, health, or similar codes
and standards applicable to housing. Rehabilitation loans shall be made only when the
agency determines that financing is not otherwise available, in whole or in part, from private
lenders upon equivalent terms and conditions. Accessibility rehabilitation loans authorized
under this subdivision may be made to eligible persons and families without limitations
relating to the maximum incomes of the borrowers if:

(1) the borrower or a member of the borrower's family requires a level of care provided
in a hospital, skilled nursing facility, or intermediate care facility for persons with
developmental disabilities;

(2) home care is appropriate; and

(3) the improvement will enable the borrower or a member of the borrower's family to
reside in the housing.

The agency may waive any requirement that the housing units in a residential housing
development be rented to persons of low and moderate income if the development consists
of four or fewer dwelling units, one of which is occupied by the owner.

Sec. 3.

Minnesota Statutes 2022, section 462A.05, subdivision 14a, is amended to read:

Subd. 14a.

Rehabilitation loans; existing owner-occupied residential housing.

It may
make loans to persons and families of low and moderate income to rehabilitate or to assist
in rehabilitating existing residential housing owned and occupied by those persons or
families. Rehabilitation may include replacement of manufactured homes. No loan shall be
made unless the agency determines that the loan will be used primarily for rehabilitation
work necessary for health or safety, essential accessibility improvements, or to improve the
energy efficiency deleted text begin of deleted text end new text begin , clean energy, greenhouse gas emissions reductions, climate resiliency,
and other qualified projects in new text end the dwelling. No loan for rehabilitation of owner-occupied
residential housing shall be denied solely because the loan will not be used for placing the
residential housing in full compliance with all state, county or municipal building, housing
maintenance, fire, health or similar codes and standards applicable to housing. The amount
of any loan shall not exceed the lesser of (a) a maximum loan amount determined under
rules adopted by the agency not to exceed $37,500, or (b) the actual cost of the work
performed, or (c) that portion of the cost of rehabilitation which the agency determines
cannot otherwise be paid by the person or family without the expenditure of an unreasonable
portion of the income of the person or family. Loans made in whole or in part with federal
funds may exceed the maximum loan amount to the extent necessary to comply with federal
lead abatement requirements prescribed by the funding source. In making loans, the agency
shall determine the circumstances under which and the terms and conditions under which
all or any portion of the loan will be repaid and shall determine the appropriate security for
the repayment of the loan. Loans pursuant to this subdivision may be made with or without
interest or periodic payments.

Sec. 4.

Minnesota Statutes 2022, section 462A.05, subdivision 14b, is amended to read:

Subd. 14b.

Energy deleted text begin conservation deleted text end new text begin decarbonization and climate resiliency new text end loans.

It
may agree to purchase, make, or otherwise participate in the making, and may enter into
commitments for the purchase, making, or participating in the making, of loans to persons
and families, without limitations relating to the maximum incomes of the borrowers, to
assist in energy deleted text begin conservation rehabilitation measures deleted text end new text begin decarbonization, climate resiliency,
and other qualified projects new text end for existing housing owned by those persons or families
including, but not limited to: weatherstripping and caulking; chimney construction or
improvement; furnace or space heater repair, cleaning or replacement; central air conditioner
new text begin installation, new text end repair, maintenance, or replacement; air source or geothermal heat pump
new text begin installation, new text end repair, maintenance, or replacement; insulation; windows and doors; and
structural or other directly related repairs new text begin or installations new text end essential for energy deleted text begin conservation deleted text end new text begin
decarbonization, climate resiliency, and other qualified projects new text end . Loans shall be made only
when the agency determines that financing is not otherwise available, in whole or in part,
from private lenders upon equivalent terms and conditions. Loans under this subdivision
or subdivision 14 may:

(1) be integrated with a utility's on-bill repayment program approved under section
216B.241, subdivision 5d; and

(2) also be made for the installation of on-site solar energy or energy storage systems.

Sec. 5.

Minnesota Statutes 2022, section 462A.05, subdivision 15, is amended to read:

Subd. 15.

Rehabilitation grants.

(a) It may make grants to persons and families of low
and moderate income to pay or to assist in paying a loan made pursuant to subdivision 14,
or to rehabilitate or to assist in rehabilitating existing residential housing owned or occupied
by such persons or families. For the purposes of this section, persons of low and moderate
income include administrators appointed pursuant to section 504B.425, paragraph (d). No
grant shall be made unless the agency determines that the grant will be used primarily to
make the housing more desirable to live in, to increase the market value of the housing or
for compliance with state, county or municipal building, housing maintenance, fire, health
or similar codes and standards applicable to housing, or to accomplish energy deleted text begin conservation
related improvements deleted text end new text begin decarbonization, climate resiliency, or other qualified projects new text end . In
unincorporated areas and municipalities not having codes and standards, the agency may,
solely for the purpose of administering this provision, establish codes and standards. No
grant for rehabilitation of owner occupied residential housing shall be denied solely because
the grant will not be used for placing the residential housing in full compliance with all
state, county or municipal building, housing maintenance, fire, health or similar codes and
standards applicable to housing. The amount of any grant shall not exceed the lesser of (a)
$6,000, or (b) the actual cost of the work performed, or (c) that portion of the cost of
rehabilitation which the agency determines cannot otherwise be paid by the person or family
without spending an unreasonable portion of the income of the person or family thereon.
In making grants, the agency shall determine the circumstances under which and the terms
and conditions under which all or any portion thereof will be repaid and shall determine the
appropriate security should repayment be required.

(b) The agency may also make grants to rehabilitate or to assist in rehabilitating housing
under this subdivision to persons of low and moderate income for the purpose of qualifying
as foster parents.

Sec. 6.

Minnesota Statutes 2022, section 462A.05, subdivision 15b, is amended to read:

Subd. 15b.

Energy deleted text begin conservation deleted text end new text begin decarbonization and climate resiliency new text end grants.

(a)
It may make grants to assist in energy deleted text begin conservation rehabilitation measures deleted text end new text begin decarbonization,
climate resiliency, and other qualified projects new text end for existing owner occupied housing including,
but not limited to: insulation, storm windows and doors, furnace or space heater repair,
cleaning or replacement, chimney construction or improvement, weatherstripping and
caulking, deleted text begin and deleted text end structural or other directly related repairs new text begin , or installations new text end essential for energy
deleted text begin conservation deleted text end new text begin decarbonization, climate resiliency, and other qualified projects new text end . The grant to
any household shall not exceed $2,000.

(b) To be eligible for an emergency energy deleted text begin conservation deleted text end new text begin decarbonization and climate
resiliency new text end grant, a household must be certified as eligible to receive emergency residential
heating assistance under either the federal or the state program, and either (1) have had a
heating cost for the preceding heating season that exceeded 120 percent of the regional
average for the preceding heating season for that energy source as determined by the
commissioner of employment and economic development, or (2) be eligible to receive a
federal energy conservation grant, but be precluded from receiving the grant because of a
need for directly related repairs that cannot be paid for under the federal program. The
Housing Finance Agency shall make a reasonable effort to determine whether other state
or federal loan and grant programs are available and adequate to finance the intended
improvements. An emergency energy conservation grant may be made in conjunction with
grants or loans from other state or federal programs that finance other needed rehabilitation
work. The receipt of a grant pursuant to this section shall not affect the applicant's eligibility
for other Housing Finance Agency loan or grant programs.

Sec. 7.

Minnesota Statutes 2022, section 462A.05, subdivision 21, is amended to read:

Subd. 21.

Rental property loans.

The agency may make or purchase loans to owners
of rental property that is occupied or intended for occupancy primarily by low- and
moderate-income tenants and which does not comply with the standards established in
section 326B.106, subdivision 1, for the purpose of energy deleted text begin improvements deleted text end new text begin decarbonization,
climate resiliency, and other qualified projects new text end necessary to bring the property into full or
partial compliance with these standards. For property which meets the other requirements
of this subdivision, a loan may also be used for moderate rehabilitation of the property. The
authority granted in this subdivision is in addition to and not in limitation of any other
authority granted to the agency in this chapter. The limitations on eligible mortgagors
contained in section 462A.03, subdivision 13, do not apply to loans under this subdivision.
Loans for the improvement of rental property pursuant to this subdivision may contain
provisions that repayment is not required in whole or in part subject to terms and conditions
determined by the agency to be necessary and desirable to encourage owners to maximize
rehabilitation of properties.

Sec. 8.

Minnesota Statutes 2022, section 462A.05, subdivision 23, is amended to read:

Subd. 23.

Insuring financial institution loans.

The agency may participate in loans or
establish a fund to insure loans, or portions of loans, that are made by any banking institution,
savings association, or other lender approved by the agency, organized under the laws of
this or any other state or of the United States having an office in this state, to owners of
renter-occupied homes or apartments that do not comply with standards set forth in section
326B.106, subdivision 1, without limitations relating to the maximum incomes of the owners
or tenants. The proceeds of the insured portion of the loan must be used to pay the costs of
improvements, including all related structural and other improvements, that will reduce
energy consumption new text begin , that will decarbonize, and that will ensure the climate resiliency of
housing new text end .

Sec. 9.

Minnesota Statutes 2022, section 462A.21, subdivision 7, is amended to read:

Subd. 7.

Energy efficiency loans.

The agency may make loans to low and moderate
income persons who own existing residential housing for the purpose of improving the
deleted text begin efficient deleted text end energy deleted text begin utilization deleted text end new text begin decarbonization and climate resiliency new text end of the housing. Permitted
improvements shall include installation or upgrading of ceiling, wall, floor and duct
insulation, storm windows and doors, and caulking and weatherstripping. The improvements
shall not be inconsistent with the energy standards as promulgated as part of the State
Building Code; provided that the improvements need not bring the housing into full
compliance with the energy standards. Any loan for such purpose shall be made only upon
determination by the agency that such loan is not otherwise available, wholly or in part,
from private lenders upon equivalent terms and conditions. The agency may promulgate
rules as necessary to implement and make specific the provisions of this subdivision. The
rules shall be designed to permit the state, to the extent not inconsistent with this chapter,
to seek federal grants or loans for energy deleted text begin purposes deleted text end new text begin decarbonization, climate resiliency, and
other qualified projects new text end .