S.F. 2211 Section 1. NEW SECTION . 16.43 Home loan program fund. 1 1. A home loan program fund is created in the state 2 treasury under the control of the authority. The fund shall 3 consist of moneys appropriated to or deposited in the fund. 4 Moneys in the fund are appropriated to the authority for the 5 purpose of providing grants to nonprofit organizations that 6 provide affordable mortgages or home repair loans to low-income 7 persons. Moneys transferred by the authority for deposit 8 in the home loan program fund, moneys appropriated to the 9 home loan program fund, and any other moneys available to 10 and obtained or accepted by the authority for placement in 11 the home loan program fund shall be deposited in the fund. 12 Additionally, payment of interest, recaptures of awards, 13 and other repayments to the home loan program fund shall be 14 deposited in the fund. 15 2. Notwithstanding section 12C.7, subsection 2, interest 16 or earnings on moneys in the home loan program fund shall be 17 credited to the fund. Notwithstanding section 8.33, moneys 18 that remain unencumbered or unobligated at the end of the 19 fiscal year shall not revert but shall remain available for the 20 same purpose in the succeeding fiscal year. 21 3. The authority shall develop an application process to 22 receive a grant from the fund. To be eligible to receive a 23 grant, all of the following must be true: 24 a. The applicant must be a nonprofit organization, with its 25 primary office located in Iowa, that focuses on homeownership 26 lending. 27 b. The applicant must be certified by the federal 28 department of the treasury as a community development financial 29 institution loan fund. 30 4. A loan provided from the grant moneys shall be limited to 31 persons whose income is less than one hundred twenty percent of 32 the latest area median income of the region as calculated by 33 the federal department of housing and urban development. 34 5. Moneys granted from the fund may be used for mortgage 35 -1- LSB 5581XS (2) 89 cm/jh 1/ 7

S.F. 2211 or home repair loans, educational opportunities for borrowers, 1 loan loss reserves, and reasonable administrative expenses. 2 The authority may also provide loans, in an intermediary 3 capacity, to other nonprofit housing organizations that provide 4 mortgage or home repair loans and educational opportunities 5 for borrowers meeting the criteria in subsection 4. At least 6 one-half of the grants available in the fund shall be provided 7 to applicants serving rural communities. 8 6. The authority shall adopt rules pursuant to chapter 17A 9 necessary to implement and administer this section, including 10 but not limited to eligibility requirements for financial 11 institutions or other lenders to receive funding through the 12 home loan program fund. The authority shall use no more than 13 five percent of moneys allocated for program administration. 14 Sec. 2. NEW SECTION . 16.52 Housing renewal program fund. 15 1. A housing renewal program fund is created in the 16 state treasury under the control of the authority. The fund 17 shall consist of moneys appropriated to or deposited in the 18 fund. Moneys in the fund are appropriated to the authority 19 to establish and administer a housing renewal program. Under 20 the program, the authority shall provide grants to eligible 21 participants for purposes of acquisition, rehabilitation, and 22 resale of ownership units and the acquisition and demolition 23 of blighted structures and redevelopment of ownership units. 24 Moneys transferred by the authority for deposit in the housing 25 renewal program fund, moneys appropriated to the housing 26 renewal program fund, and any other moneys available to and 27 obtained or accepted by the authority for placement in the 28 housing renewal program fund shall be deposited in the fund. 29 Additionally, payment of interest, recaptures of awards, and 30 other repayments to the housing renewal program fund shall be 31 deposited in the fund. 32 2. Notwithstanding section 12C.7, subsection 2, interest or 33 earnings on moneys in the housing renewal program fund shall 34 be credited to the fund. Notwithstanding section 8.33, moneys 35 -2- LSB 5581XS (2) 89 cm/jh 2/ 7

S.F. 2211 that remain unencumbered or unobligated at the end of the 1 fiscal year shall not revert but shall remain available for the 2 same purpose in the succeeding fiscal year. 3 3. Twenty-five percent of moneys appropriated to the fund 4 shall be allocated to rural communities in the eighty-eight 5 least populated counties in the state. 6 4. a. A city, county, a consortium of local governments, an 7 organization exempt from taxation pursuant to section 501(c)(3) 8 of the Internal Revenue Code, and a housing trust fund are 9 eligible to receive a grant from the fund for a project that 10 meets a purpose described in subsection 1 and that is any of 11 the following: 12 (1) Rehabilitation activities that equal or exceed 13 twenty-five thousand dollars and are substantial to the human 14 health, safety, and energy efficiency of the unit. 15 (2) Demolition of a blighted structure that exhibits 16 objectively determinable signs of deterioration sufficient 17 to constitute a threat to human health, safety, and public 18 welfare. 19 b. The grantee will determine the geographic location of the 20 project. 21 c. The authority shall not award a grantee more than 22 one million dollars. The grantee shall not use more than 23 one hundred thousand dollars per ownership unit on the 24 project. A grantee may use up to ten percent of the grant for 25 administration of the project. 26 d. (1) The grantee shall have thirty-six months from the 27 date of the signed contract between the authority and the 28 grantee to complete the project. A project will be considered 29 completed when the funds have been expended and the ownership 30 units are finished and available for sale. 31 (2) If a grantee has no project activity within thirty-six 32 months from the date of the signed contract between the 33 authority and the grantee, the grant award shall be returned to 34 the authority for deposit in the housing renewal program fund. 35 -3- LSB 5581XS (2) 89 cm/jh 3/ 7

S.F. 2211 e. The grantee shall sell the renewed ownership unit to 1 a homebuyer whose income is under the one hundred twenty 2 percent area median income and who will occupy the ownership 3 unit as the homebuyer’s primary residence. The deed to the 4 ownership unit must contain a restrictive resale requirement 5 that prohibits the buyer or a subsequent owner from selling the 6 ownership unit to a person with an income above the one hundred 7 twenty percent area median income for five years from the date 8 the grantee sold the ownership unit. 9 5. A grantee may use income generated from the sale of 10 ownership units only for the purpose of additional program 11 eligible expenses. 12 6. The authority shall adopt rules pursuant to chapter 13 17A necessary to implement and administer this section. The 14 authority shall not use more than five percent of moneys 15 allocated to the fund for administration of the program. 16 Sec. 3. Section 541A.2, subsection 1, paragraph a, Code 17 2022, is amended to read as follows: 18 a. To be eligible to open an account, a prospective account 19 holder must have a household income that is equal to or less 20 than two hundred fifty percent of the federal poverty level and 21 has completed a financial counseling curriculum . 22 Sec. 4. Section 541A.2, Code 2022, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 10. An account holder may make withdrawals 25 from the account holder’s account for up to three years from 26 the date the account is opened. 27 Sec. 5. DEPARTMENT OF HUMAN RIGHTS —— INDIVIDUAL 28 DEVELOPMENT ACCOUNT STATE MATCH FUND —— APPROPRIATION. 29 Notwithstanding the purpose described in section 541A.7, 30 subsection 2, there is appropriated to the individual 31 development account state match fund created in section 541A.7 32 the following amount, or so much thereof as is necessary, for 33 the promotion of affordable homeownership and to increase 34 self-reliance among individual development account holders and 35 -4- LSB 5581XS (2) 89 cm/jh 4/ 7

S.F. 2211 potential account holders: 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 2 Sec. 6. HOME LOAN PROGRAM FUND —— TRANSFER. There is 3 transferred from the general fund of the state to the home 4 loan program fund created in section 16.43 for the fiscal year 5 beginning July 1, 2022, and ending June 30, 2023, the following 6 amount: 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 8 Sec. 7. HOUSING RENEWAL PROGRAM FUND —— TRANSFER. There is 9 transferred from the general fund of the state to the housing 10 renewal program fund for the fiscal year beginning July 1, 11 2022, and ending June 30, 2023, the following amount: 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000,000 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill requires the Iowa finance authority (authority) to 17 establish a home loan program fund for the purpose of providing 18 and fostering lending programs and other services to facilitate 19 mortgage and repair loans to low-income and moderate-income 20 homebuyers and homeowners, creates a housing renewal program 21 to invest in housing rehabilitation and redevelopment in 22 this state, and also makes changes to individual development 23 accounts. 24 The bill provides that the home loan program fund shall 25 include a forgivable loan program for qualifying home 26 improvements, repairs, and renovations for an owner-occupied 27 home. The bill requires the authority to adopt rules governing 28 the loan program and specifies the types of improvements, 29 repairs, and renovations authorized for the program. An 30 applicant is eligible to receive a grant from the home loan 31 program fund if the applicant is a nonprofit organization, 32 with its primary office located in Iowa, that focuses on 33 homeownership lending and the applicant is certified by the 34 federal department of the treasury as a community development 35 -5- LSB 5581XS (2) 89 cm/jh 5/ 7

S.F. 2211 financial institution loan fund. A loan provided from the 1 grant shall be limited to persons whose income is less than 120 2 percent of the latest area median income of the region. The 3 program shall earmark half of the moneys allocated to the fund 4 to serve rural communities. 5 The bill provides for a transfer of $25 million from the 6 general fund of the state to the home loan program fund 7 intended to be used for purposes of the home loan program. 8 The bill provides that all moneys in the fund which remain 9 unexpended or unobligated at the close of a fiscal year shall 10 not revert but shall remain available in subsequent fiscal 11 years. The program may use up to 5 percent of the moneys 12 allocated for program administration. 13 The bill creates the housing renewal program fund within 14 the authority. The program shall provide grants to a city, 15 county, a consortium of local governments, nonprofit 501(c)(3) 16 organization, or housing trust fund to acquire, rehabilitate, 17 or demolish blighted structures, and redevelop ownership units 18 with 25 percent of moneys appropriated to the fund earmarked 19 for rural communities in the 88 least populated counties in 20 the state. An approved project must be a rehabilitation 21 activity estimated to cost $25,000 or more and be substantial 22 to the human health, safety, and energy efficiency of the unit 23 or a demolition of a blighted structure that is a threat to 24 human health, safety, and public welfare. A grant may be no 25 more than $1 million and a project shall not spend more than 26 $100,000 in the rehabilitation of a single ownership unit. A 27 grantee has three years, to complete the project and sell the 28 rehabilitated or new affordable housing ownership units, and if 29 there has been no progress on an approved project within three 30 years the grantee shall return the grant award money to the 31 authority to be returned to the housing renewal program fund. 32 When selling a completed ownership unit, the grantee must sell 33 the unit to a homebuyer purchasing a primary residence that is 34 under the 120 percent area median income with a covenant that 35 -6- LSB 5581XS (2) 89 cm/jh 6/ 7

S.F. 2211 restricts the buyer from selling the unit to a person with an 1 income that exceeds 120 percent of the area median income for 2 five years. 3 The bill provides for a transfer of $25 million from the 4 general fund of the state to the housing renewal program fund. 5 The bill provides that all moneys in the fund which remain 6 unexpended or unobligated at the close of a fiscal year shall 7 not revert but shall remain available in subsequent fiscal 8 years. The program may use up to 5 percent of the moneys 9 allocated for program administration. 10 Individual development accounts are matched savings accounts 11 that can typically be used only for purchasing a first home, 12 capitalizing a small business, or educational or job training 13 expenses to enable low-income families to save, build assets, 14 and develop financial independence. Accounts are held at local 15 financial institutions. 16 The bill changes the eligibility requirements for an 17 individual development account by providing that a person must 18 have household income that is equal to or less than the 250 19 percent federal poverty level and has completed a financial 20 counseling curriculum. Under current law, a person’s household 21 income has to be at or below the 200 percent of the federal 22 poverty level and there is no requirement to complete a 23 financial counseling curriculum. 24 The bill provides that an account holder may use the 25 individual development account for up to three years. 26 The bill provides for a $1 million appropriation in order 27 to promote affordable homeownership to low-income Iowans. The 28 Iowa development accounts program has not received new funding 29 in several years and previous funding has gone primarily to 30 homeownership. 31 -7- LSB 5581XS (2) 89 cm/jh 7/ 7