House Study Bill 599 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON ECONOMIC GROWTH BILL BY CHAIRPERSON WHEELER) A BILL FOR An Act relating to matters under the purview of the Iowa 1 finance authority, including the purchase of single-family 2 or multifamily residences by a first-time homebuyer, the 3 creation of the first-time homebuyer grant fund, providing 4 for fees, and making an appropriation. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5823YC (4) 88 ja/rn

H.F. _____ Section 1. NEW SECTION . 16.43 First-time homebuyer grant 1 fund —— appropriation. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “First-time homebuyer” means an individual who is 5 a resident of this state and who does not own, either 6 individually or jointly, a single-family or multifamily 7 residence, and who has not owned or purchased, either 8 individually or jointly, a single-family or multifamily 9 residence for a period of ten years prior to the date the 10 individual submits an application to the authority pursuant to 11 subsection 4. 12 b. “Household income” means all income received by the 13 first-time homebuyer and all individuals eighteen years of age 14 or older who reside with the first-time homebuyer. 15 2. A first-time homebuyer grant fund is created within the 16 authority. Moneys in the first-time homebuyer grant fund are 17 appropriated to the authority to be used to provide grants 18 to first-time homebuyers with a household income that does 19 not exceed eighty percent of the national average to assist 20 them in paying down payment and closing costs associated with 21 purchasing a single-family or multifamily residence. 22 3. For the fiscal year beginning July 1, 2020, and each 23 fiscal year thereafter, there is appropriated from the general 24 fund of the state to the first-time homebuyer grant fund the 25 sum of two hundred fifty thousand dollars to be used for grants 26 as provided in this section. Notwithstanding section 8.33, 27 moneys in the fund that remain unencumbered or unobligated 28 at the close of the fiscal year shall not revert but shall 29 remain available for expenditure for the purposes designated. 30 Notwithstanding section 12C.7, subsection 2, interest or 31 earnings on moneys in the fund shall be credited to the fund. 32 4. A first-time homebuyer seeking an award pursuant to this 33 section shall make application to the authority in the manner 34 prescribed by the authority. The authority shall establish 35 -1- LSB 5823YC (4) 88 ja/rn 1/ 4

H.F. _____ by rule criteria for the review and approval of submitted 1 applications. Authority may determine and collect a reasonable 2 application fee. The application fees collected shall be used 3 exclusively for costs associated with the review and approval 4 of applications. 5 5. To qualify for a grant under the fund, all of the 6 following requirements shall be met: 7 a. The single-family or multifamily residence must serve 8 as the first-time homebuyer’s primary residence after the 9 purchase. 10 b. Prior to the purchase, the first-time homebuyer must 11 complete the financial literacy program established under 12 the federal affordable housing program, codified at 12 13 U.S.C. §1430(j), or a similar program to be developed by the 14 authority. 15 c. The maximum purchase price for the single-family or 16 multifamily residence to be purchased must not exceed an amount 17 determined by the authority by rule. 18 6. The maximum amount of a grant the authority may award to 19 a first-time homebuyer under this section is two thousand five 20 hundred dollars. 21 7. To the extent possible, the authority shall track 22 when a first-time homebuyer who received a grant pursuant to 23 this section sells a single-family or multifamily residence 24 purchased using the grant funds. If a first-time homebuyer who 25 received a grant pursuant to this section sells a single-family 26 or multifamily residence purchased using the grant funds within 27 five years following the date of purchase, the first-time 28 homebuyer shall notify the authority of the sale, and shall 29 pay to the authority an amount equal to forty-one dollars and 30 sixty-seven cents multiplied by the difference between sixty 31 less the number of months the first-time homebuyer owned the 32 single-family or multifamily residence. The payments received 33 by the authority under this subsection shall be deposited in 34 the fund. 35 -2- LSB 5823YC (4) 88 ja/rn 2/ 4

H.F. _____ 8. The authority may adopt rules as necessary for the 1 implementation and administration of this section. 2 EXPLANATION 3 The inclusion of this explanation does not constitute agreement with 4 the explanation’s substance by the members of the general assembly. 5 This bill relates to matters under the purview of the Iowa 6 finance authority, including the purchase of single-family 7 or multifamily residences by a first-time homebuyer, the 8 creation of the first-time homebuyer grant fund, and making an 9 appropriation. 10 The bill defines “first-time homebuyer” as an individual 11 who is a resident of this state and who does not own, and 12 who has not owned for the last 10 years, either individually 13 or jointly, a single-family or multifamily residence. The 14 bill defines “household income” as all income received by the 15 first-time homebuyer and all individuals 18 years of age or 16 older who reside with the first-time homebuyer. 17 The bill establishes a first-time homebuyer grant fund 18 within the authority. The bill authorizes the authority to 19 provide grants from the fund to first-time homebuyers with 20 a household income that does not exceed 80 percent of the 21 national average to assist them in paying down payment and 22 closing costs for a single-family or multifamily residence. 23 The bill appropriates $250,000 to the fund beginning July 1, 24 2020, and each fiscal year thereafter. 25 The bill requires a first-time homebuyer seeking an award 26 from the fund to submit an application to the authority. The 27 bill provides that the authority is to establish criteria for 28 the review and approval of applications by rule and that the 29 authority may determine and collect a reasonable application 30 fee. In addition, the bill directs that such application fees 31 be used exclusively for costs associated with the review and 32 approval of the applications. 33 The bill also establishes three requirements that must be 34 met before moneys can be awarded from the fund: the residence 35 -3- LSB 5823YC (4) 88 ja/rn 3/ 4

H.F. _____ must serve as the first-time homebuyer’s primary residence; 1 the first-time homebuyer must complete a financial literacy 2 program; and the maximum purchase price for the residence to 3 be purchased must not exceed the amount determined by the 4 authority. 5 The bill limits the amount the authority may award to a 6 first-time homebuyer from the fund to $2,500. 7 The bill directs the authority, to the extent possible, to 8 track when a first-time homebuyer sells a residence that was 9 purchased using moneys from the fund. The bill also requires 10 first-time homebuyers to notify the authority of the sale of 11 the residence purchased and repay moneys to the fund in certain 12 circumstances. If a first-time homebuyer who received a grant 13 from the fund sells the residence purchased within five years 14 following the purchase, the first-time homebuyer shall notify 15 the authority of the sale and shall pay to the authority an 16 amount equal to $41.67 multiplied by the difference between 60 17 less the number of months the first-time homebuyer owned the 18 residence. The bill provides that these payments are to be 19 deposited in the fund. 20 The bill requires the authority to adopt rules as necessary 21 for implementation and administration of the grant fund. 22 -4- LSB 5823YC (4) 88 ja/rn 4/ 4