House File 2735 - Introduced HOUSE FILE 2735 BY McBURNEY , B. MEYER , BAGNIEWSKI , WICHTENDAHL , KURTH , MATSON , BROWN-POWERS , BAETH , RAMIREZ , R. JOHNSON , CROKEN , KRESSIG , WESSEL-KROESCHELL , and JACOBY A BILL FOR An Act relating to programs administered by the Iowa finance 1 authority including the firsthome program and home 2 ownership assistance program for military members, making 3 appropriations, and including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5705YH (5) 91 nls/ko

H.F. 2735 Section 1. NEW SECTION . 16.54A Firsthome program. 1 1. For the purposes of this section: 2 a. “First-time homebuyer” means any of the following: 3 (1) An individual who has not owned a primary residence in 4 the last three consecutive years immediately prior to the date 5 of the individual’s application for the firsthome program. 6 (2) A member of the military who has not previously used a 7 mortgage revenue bond program to finance a home purchase. 8 (3) An individual who is purchasing a home in a targeted 9 area as determined by the authority. 10 b. “Member of the military” means any of the following: 11 (1) An individual who has served ninety days active duty 12 between August 2, 1990, and April 6, 1991, or September 11, 13 2001, to the date of application for the firsthome program. 14 The ninety days of active duty may be cumulative, but are not 15 required to be consecutive. Inactive duty training, annual 16 training, and active duty for training shall not count toward 17 the ninety days. 18 (2) An individual who is a former member of the national 19 guard, or a reserve or regular component of the armed forces of 20 the United States, who was honorably discharged due to injuries 21 incurred while on federal active duty beginning on or after 22 September 11, 2001, or during the period of the Persian Gulf 23 Conflict, beginning August 2, 1990, and ending April 6, 1991, 24 that precluded completion of a minimum aggregate of ninety days 25 of federal active duty. 26 (3) The surviving spouse of an individual under 27 subparagraph (1) or (2). 28 c. “Program” means the firsthome program established in this 29 section. 30 d. “Second loan” means a loan that is up to a certain 31 percentage of the sale price of a home, or a certain fixed 32 dollar amount, that must be repaid when the home is sold, 33 refinanced, or the first mortgage on the home is satisfied. 34 2. The firsthome program is established to provide 35 -1- LSB 5705YH (5) 91 nls/ko 1/ 4

H.F. 2735 assistance to eligible first-time homebuyers. The firsthome 1 program shall be administered by the authority and shall 2 provide grants for down payment and closing cost assistance, 3 second loans, free Iowa title guaranty owner’s certificates, 4 and other assistance to eligible first-time homebuyers. 5 3. To qualify for assistance under the firsthome program, an 6 individual must meet the following requirements: 7 a. The individual must be a first-time homebuyer. 8 b. The individual’s household income must meet eligibility 9 requirements established by the authority by rule. 10 c. The purchase price of the home that the individual wants 11 to purchase must be within the price limits established by the 12 authority by rule. 13 d. The individual must occupy the purchased home as a 14 primary residence within sixty days of closing. 15 e. The individual must have a minimum credit score of six 16 hundred forty. If an individual does not have a credit score, 17 nontraditional credit documentation may be submitted to the 18 authority as established by the authority by rule. 19 f. The individual’s debt-to-income ratio must be no greater 20 than fifty percent. 21 g. The individual must complete homebuyer education as 22 established by the authority by rule. 23 h. The individual must contact an Iowa finance authority 24 participating lender. 25 4. An individual must submit an application for the program 26 in the form and manner as established by the authority by rule. 27 5. An individual who receives assistance under the 28 firsthome program may also participate in other loan and grant 29 programs administered by the authority if the individual 30 qualifies for the other loan or grant program. 31 6. Assistance provided in the form of a grant to an 32 individual under the firsthome program shall not exceed ten 33 thousand dollars. 34 7. The authority shall adopt rules pursuant to chapter 17A 35 -2- LSB 5705YH (5) 91 nls/ko 2/ 4

H.F. 2735 as necessary to implement and administer this section. 1 Sec. 2. MILITARY HOME OWNERSHIP ASSISTANCE PROGRAM —— FY 2 2025-2026 APPROPRIATION. 3 1. There is appropriated from the general fund of the state 4 to the Iowa finance authority for the fiscal year beginning 5 July 1, 2025, and ending June 30, 2026, the following amount, 6 or so much thereof as is necessary, to be used for the purposes 7 designated: 8 To supplement the appropriation for the continuation of the 9 home ownership assistance program for persons who are or were 10 eligible members of the armed forces of the United States, or 11 eligible service members pursuant to section 16.54, as provided 12 in 2025 Iowa Acts, chapter 169, section 1, subsection 3: 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,200,000 14 2. Notwithstanding section 8.33, moneys appropriated in 15 this section that remain unencumbered or unobligated at the 16 close of the fiscal year shall not revert but shall remain 17 available for expenditure for the purposes designated until the 18 close of the succeeding fiscal year. 19 Sec. 3. EFFECTIVE DATE. This Act, being deemed of immediate 20 importance, takes effect upon enactment. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 This bill relates to matters under the purview of the Iowa 25 finance authority including the firsthome program and the home 26 ownership assistance program for military members. 27 The bill codifies the firsthome program administered by 28 the Iowa finance authority and requires that the program 29 be administered by the authority to provide down payment 30 and closing cost assistance grants, second loans, free Iowa 31 title guaranty owner’s certificates, or other assistance to 32 eligible first-time homebuyers. “First-time homebuyer” and 33 “second loan” are defined in the bill. The requirements for an 34 individual to qualify for the program are detailed in the bill. 35 -3- LSB 5705YH (5) 91 nls/ko 3/ 4

H.F. 2735 The maximum assistance that may be provided in the form of a 1 grant to an individual under the firsthome program is $10,000. 2 The Iowa finance authority shall adopt rules as necessary to 3 implement and administer the bill. 4 The bill appropriates $2.2 million from the general fund of 5 the state to the Iowa finance authority for FY 2025-2026 to be 6 used for the military home ownership assistance program, which 7 provides financial assistance to current and former members 8 of the United States armed forces for purchasing homes. The 9 bill’s appropriation supplements the FY 2025-2026 appropriation 10 passed by the general assembly ($2.2 million). 11 The bill takes effect upon enactment. 12 -4- LSB 5705YH (5) 91 nls/ko 4/ 4