HSB 599 (LSB 5823YC (4) 88)

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 finance authority, including the purchase of single-family or multifamily residences by a first-time homebuyer, the creation of the first-time homebuyer grant fund, providing for fees, and making an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  16.43  First-time homebuyer grant fund —— appropriation.
   1.  As used in this section, unless the context otherwise requires:
   a.  “First-time homebuyer” means an individual who is a resident of this state and who does not own, either individually or jointly, a single-family or multifamily residence, and who has not owned or purchased, either individually or jointly, a single-family or multifamily residence for a period of ten years prior to the date the individual submits an application to the authority pursuant to subsection 4.
   b.  “Household income” means all income received by the first-time homebuyer and all individuals eighteen years of age or older who reside with the first-time homebuyer.
   2.  A first-time homebuyer grant fund is created within the authority. Moneys in the first-time homebuyer grant fund are appropriated to the authority to be used to provide grants to first-time homebuyers with a household income that does not exceed eighty percent of the national average to assist them in paying down payment and closing costs associated with purchasing a single-family or multifamily residence.
   3.  For the fiscal year beginning July 1, 2020, and each fiscal year thereafter, there is appropriated from the general fund of the state to the first-time homebuyer grant fund the sum of two hundred fifty thousand dollars to be used for grants as provided in this section. Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.
   4.  A first-time homebuyer seeking an award pursuant to this section shall make application to the authority in the manner prescribed by the authority. The authority shall establish by rule criteria for the review and approval of submitted applications. Authority may determine and collect a reasonable application fee. The application fees collected shall be used exclusively for costs associated with the review and approval of applications.
   5.  To qualify for a grant under the fund, all of the following requirements shall be met:
   a.  The single-family or multifamily residence must serve as the first-time homebuyer’s primary residence after the purchase.
   b.  Prior to the purchase, the first-time homebuyer must complete the financial literacy program established under the federal affordable housing program, codified at 12 U.S.C. §1430(j), or a similar program to be developed by the authority.
   c.  The maximum purchase price for the single-family or multifamily residence to be purchased must not exceed an amount determined by the authority by rule.
   6.  The maximum amount of a grant the authority may award to a first-time homebuyer under this section is two thousand five hundred dollars.
   7.  To the extent possible, the authority shall track when a first-time homebuyer who received a grant pursuant to this section sells a single-family or multifamily residence purchased using the grant funds. If a first-time homebuyer who received a grant pursuant to this section sells a single-family or multifamily residence purchased using the grant funds within five years following the date of purchase, the first-time homebuyer shall notify the authority of the sale, and shall pay to the authority an amount equal to forty-one dollars and sixty-seven cents multiplied by the difference between sixty less the number of months the first-time homebuyer owned the single-family or multifamily residence. The payments received by the authority under this subsection shall be deposited in the fund.
   8.  The authority may adopt rules as necessary for the implementation and administration of this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to matters under the purview of the Iowa finance authority, including the purchase of single-family or multifamily residences by a first-time homebuyer, the creation of the first-time homebuyer grant fund, and making an appropriation.
   The bill defines “first-time homebuyer” as an individual who is a resident of this state and who does not own, and who has not owned for the last 10 years, either individually or jointly, a single-family or multifamily residence. The bill defines “household income” as all income received by the first-time homebuyer and all individuals 18 years of age or older who reside with the first-time homebuyer.
   The bill establishes a first-time homebuyer grant fund within the authority. The bill authorizes the authority to provide grants from the fund to first-time homebuyers with a household income that does not exceed 80 percent of the national average to assist them in paying down payment and closing costs for a single-family or multifamily residence. The bill appropriates $250,000 to the fund beginning July 1, 2020, and each fiscal year thereafter.
   The bill requires a first-time homebuyer seeking an award from the fund to submit an application to the authority. The bill provides that the authority is to establish criteria for the review and approval of applications by rule and that the authority may determine and collect a reasonable application fee. In addition, the bill directs that such application fees be used exclusively for costs associated with the review and approval of the applications.
   The bill also establishes three requirements that must be met before moneys can be awarded from the fund: the residence must serve as the first-time homebuyer’s primary residence; the first-time homebuyer must complete a financial literacy program; and the maximum purchase price for the residence to be purchased must not exceed the amount determined by the authority.
   The bill limits the amount the authority may award to a first-time homebuyer from the fund to $2,500.
   The bill directs the authority, to the extent possible, to track when a first-time homebuyer sells a residence that was purchased using moneys from the fund. The bill also requires first-time homebuyers to notify the authority of the sale of the residence purchased and repay moneys to the fund in certain circumstances. If a first-time homebuyer who received a grant from the fund sells the residence purchased within five years following the purchase, the first-time homebuyer shall notify the authority of the sale and shall pay to the authority an amount equal to $41.67 multiplied by the difference between 60 less the number of months the first-time homebuyer owned the residence. The bill provides that these payments are to be deposited in the fund.
   The bill requires the authority to adopt rules as necessary for implementation and administration of the grant fund.