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Senate File 2211 - IntroducedA Bill ForAn Act 1relating to homeownership by creating the home loan
2program fund and the housing renewal program fund within
3the Iowa finance authority and amending qualifications for
4individual development accounts, and making appropriations
5and transfers.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 16.43 Home loan program fund.
21. A home loan program fund is created in the state
3treasury under the control of the authority. The fund shall
4consist of moneys appropriated to or deposited in the fund.
5Moneys in the fund are appropriated to the authority for the
6purpose of providing grants to nonprofit organizations that
7provide affordable mortgages or home repair loans to low-income
8persons. Moneys transferred by the authority for deposit
9in the home loan program fund, moneys appropriated to the
10home loan program fund, and any other moneys available to
11and obtained or accepted by the authority for placement in
12the home loan program fund shall be deposited in the fund.
13Additionally, payment of interest, recaptures of awards,
14and other repayments to the home loan program fund shall be
15deposited in the fund.
162. Notwithstanding section 12C.7, subsection 2, interest
17or earnings on moneys in the home loan program fund shall be
18credited to the fund. Notwithstanding section 8.33, moneys
19that remain unencumbered or unobligated at the end of the
20fiscal year shall not revert but shall remain available for the
21same purpose in the succeeding fiscal year.
223. The authority shall develop an application process to
23receive a grant from the fund. To be eligible to receive a
24grant, all of the following must be true:
25a. The applicant must be a nonprofit organization, with its
26primary office located in Iowa, that focuses on homeownership
27lending.
28b. The applicant must be certified by the federal
29department of the treasury as a community development financial
30institution loan fund.
314. A loan provided from the grant moneys shall be limited to
32persons whose income is less than one hundred twenty percent of
33the latest area median income of the region as calculated by
34the federal department of housing and urban development.
355. Moneys granted from the fund may be used for mortgage
-1-1or home repair loans, educational opportunities for borrowers,
2loan loss reserves, and reasonable administrative expenses.
3The authority may also provide loans, in an intermediary
4capacity, to other nonprofit housing organizations that provide
5mortgage or home repair loans and educational opportunities
6for borrowers meeting the criteria in subsection 4. At least
7one-half of the grants available in the fund shall be provided
8to applicants serving rural communities.
96. The authority shall adopt rules pursuant to chapter 17A
10necessary to implement and administer this section, including
11but not limited to eligibility requirements for financial
12institutions or other lenders to receive funding through the
13home loan program fund. The authority shall use no more than
14five percent of moneys allocated for program administration.
15 Sec. 2. NEW SECTION. 16.52 Housing renewal program fund.
161. A housing renewal program fund is created in the
17state treasury under the control of the authority. The fund
18shall consist of moneys appropriated to or deposited in the
19fund. Moneys in the fund are appropriated to the authority
20to establish and administer a housing renewal program. Under
21the program, the authority shall provide grants to eligible
22participants for purposes of acquisition, rehabilitation, and
23resale of ownership units and the acquisition and demolition
24of blighted structures and redevelopment of ownership units.
25Moneys transferred by the authority for deposit in the housing
26renewal program fund, moneys appropriated to the housing
27renewal program fund, and any other moneys available to and
28obtained or accepted by the authority for placement in the
29housing renewal program fund shall be deposited in the fund.
30Additionally, payment of interest, recaptures of awards, and
31other repayments to the housing renewal program fund shall be
32deposited in the fund.
332. Notwithstanding section 12C.7, subsection 2, interest or
34earnings on moneys in the housing renewal program fund shall
35be credited to the fund. Notwithstanding section 8.33, moneys
-2-1that remain unencumbered or unobligated at the end of the
2fiscal year shall not revert but shall remain available for the
3same purpose in the succeeding fiscal year.
43. Twenty-five percent of moneys appropriated to the fund
5shall be allocated to rural communities in the eighty-eight
6least populated counties in the state.
74. a. A city, county, a consortium of local governments, an
8organization exempt from taxation pursuant to section 501(c)(3)
9of the Internal Revenue Code, and a housing trust fund are
10eligible to receive a grant from the fund for a project that
11meets a purpose described in subsection 1 and that is any of
12the following:
13(1) Rehabilitation activities that equal or exceed
14twenty-five thousand dollars and are substantial to the human
15health, safety, and energy efficiency of the unit.
16(2) Demolition of a blighted structure that exhibits
17objectively determinable signs of deterioration sufficient
18to constitute a threat to human health, safety, and public
19welfare.
20b. The grantee will determine the geographic location of the
21project.
22c. The authority shall not award a grantee more than
23one million dollars. The grantee shall not use more than
24one hundred thousand dollars per ownership unit on the
25project. A grantee may use up to ten percent of the grant for
26administration of the project.
27d. (1) The grantee shall have thirty-six months from the
28date of the signed contract between the authority and the
29grantee to complete the project. A project will be considered
30completed when the funds have been expended and the ownership
31units are finished and available for sale.
32(2) If a grantee has no project activity within thirty-six
33months from the date of the signed contract between the
34authority and the grantee, the grant award shall be returned to
35the authority for deposit in the housing renewal program fund.
-3- 1e. The grantee shall sell the renewed ownership unit to
2a homebuyer whose income is under the one hundred twenty
3percent area median income and who will occupy the ownership
4unit as the homebuyer’s primary residence. The deed to the
5ownership unit must contain a restrictive resale requirement
6that prohibits the buyer or a subsequent owner from selling the
7ownership unit to a person with an income above the one hundred
8twenty percent area median income for five years from the date
9the grantee sold the ownership unit.
105. A grantee may use income generated from the sale of
11ownership units only for the purpose of additional program
12eligible expenses.
136. The authority shall adopt rules pursuant to chapter
1417A necessary to implement and administer this section. The
15authority shall not use more than five percent of moneys
16allocated to the fund for administration of the program.
17 Sec. 3. Section 541A.2, subsection 1, paragraph a, Code
182022, is amended to read as follows:
19a. To be eligible to open an account, a prospective account
20holder must have a household income that is equal to or less
21than two hundred fifty percent of the federal poverty level and
22has completed a financial counseling curriculum.
23 Sec. 4. Section 541A.2, Code 2022, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 10. An account holder may make withdrawals
26from the account holder’s account for up to three years from
27the date the account is opened.
28 Sec. 5. DEPARTMENT OF HUMAN RIGHTS — INDIVIDUAL
29 DEVELOPMENT ACCOUNT STATE MATCH FUND — APPROPRIATION.
30Notwithstanding the purpose described in section 541A.7,
31subsection 2, there is appropriated to the individual
32development account state match fund created in section 541A.7
33the following amount, or so much thereof as is necessary, for
34the promotion of affordable homeownership and to increase
35self-reliance among individual development account holders and
-4-1potential account holders:
.................................................. $21,000,000
3 Sec. 6. HOME LOAN PROGRAM FUND — TRANSFER. There is
4transferred from the general fund of the state to the home
5loan program fund created in section 16.43 for the fiscal year
6beginning July 1, 2022, and ending June 30, 2023, the following
7amount:
.................................................. $825,000,000
9 Sec. 7. HOUSING RENEWAL PROGRAM FUND — TRANSFER. There is
10transferred from the general fund of the state to the housing
11renewal program fund for the fiscal year beginning July 1,
122022, and ending June 30, 2023, the following amount:
.................................................. $1325,000,000
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill requires the Iowa finance authority (authority) to
18establish a home loan program fund for the purpose of providing
19and fostering lending programs and other services to facilitate
20mortgage and repair loans to low-income and moderate-income
21homebuyers and homeowners, creates a housing renewal program
22to invest in housing rehabilitation and redevelopment in
23this state, and also makes changes to individual development
24accounts.
25The bill provides that the home loan program fund shall
26include a forgivable loan program for qualifying home
27improvements, repairs, and renovations for an owner-occupied
28home. The bill requires the authority to adopt rules governing
29the loan program and specifies the types of improvements,
30repairs, and renovations authorized for the program. An
31applicant is eligible to receive a grant from the home loan
32program fund if the applicant is a nonprofit organization,
33with its primary office located in Iowa, that focuses on
34homeownership lending and the applicant is certified by the
35federal department of the treasury as a community development
-5-1financial institution loan fund. A loan provided from the
2grant shall be limited to persons whose income is less than 120
3percent of the latest area median income of the region. The
4program shall earmark half of the moneys allocated to the fund
5to serve rural communities.
6The bill provides for a transfer of $25 million from the
7general fund of the state to the home loan program fund
8intended to be used for purposes of the home loan program.
9The bill provides that all moneys in the fund which remain
10unexpended or unobligated at the close of a fiscal year shall
11not revert but shall remain available in subsequent fiscal
12years. The program may use up to 5 percent of the moneys
13allocated for program administration.
14The bill creates the housing renewal program fund within
15the authority. The program shall provide grants to a city,
16county, a consortium of local governments, nonprofit 501(c)(3)
17organization, or housing trust fund to acquire, rehabilitate,
18or demolish blighted structures, and redevelop ownership units
19with 25 percent of moneys appropriated to the fund earmarked
20for rural communities in the 88 least populated counties in
21the state. An approved project must be a rehabilitation
22activity estimated to cost $25,000 or more and be substantial
23to the human health, safety, and energy efficiency of the unit
24or a demolition of a blighted structure that is a threat to
25human health, safety, and public welfare. A grant may be no
26more than $1 million and a project shall not spend more than
27$100,000 in the rehabilitation of a single ownership unit. A
28grantee has three years, to complete the project and sell the
29rehabilitated or new affordable housing ownership units, and if
30there has been no progress on an approved project within three
31years the grantee shall return the grant award money to the
32authority to be returned to the housing renewal program fund.
33When selling a completed ownership unit, the grantee must sell
34the unit to a homebuyer purchasing a primary residence that is
35under the 120 percent area median income with a covenant that
-6-1restricts the buyer from selling the unit to a person with an
2income that exceeds 120 percent of the area median income for
3five years.
4The bill provides for a transfer of $25 million from the
5general fund of the state to the housing renewal program fund.
6The bill provides that all moneys in the fund which remain
7unexpended or unobligated at the close of a fiscal year shall
8not revert but shall remain available in subsequent fiscal
9years. The program may use up to 5 percent of the moneys
10allocated for program administration.
11Individual development accounts are matched savings accounts
12that can typically be used only for purchasing a first home,
13capitalizing a small business, or educational or job training
14expenses to enable low-income families to save, build assets,
15and develop financial independence. Accounts are held at local
16financial institutions.
17The bill changes the eligibility requirements for an
18individual development account by providing that a person must
19have household income that is equal to or less than the 250
20percent federal poverty level and has completed a financial
21counseling curriculum. Under current law, a person’s household
22income has to be at or below the 200 percent of the federal
23poverty level and there is no requirement to complete a
24financial counseling curriculum.
25The bill provides that an account holder may use the
26individual development account for up to three years.
27The bill provides for a $1 million appropriation in order
28to promote affordable homeownership to low-income Iowans. The
29Iowa development accounts program has not received new funding
30in several years and previous funding has gone primarily to
31homeownership.
-7-cm/jh
2program fund and the housing renewal program fund within
3the Iowa finance authority and amending qualifications for
4individual development accounts, and making appropriations
5and transfers.
6BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 16.43 Home loan program fund.
21. A home loan program fund is created in the state
3treasury under the control of the authority. The fund shall
4consist of moneys appropriated to or deposited in the fund.
5Moneys in the fund are appropriated to the authority for the
6purpose of providing grants to nonprofit organizations that
7provide affordable mortgages or home repair loans to low-income
8persons. Moneys transferred by the authority for deposit
9in the home loan program fund, moneys appropriated to the
10home loan program fund, and any other moneys available to
11and obtained or accepted by the authority for placement in
12the home loan program fund shall be deposited in the fund.
13Additionally, payment of interest, recaptures of awards,
14and other repayments to the home loan program fund shall be
15deposited in the fund.
162. Notwithstanding section 12C.7, subsection 2, interest
17or earnings on moneys in the home loan program fund shall be
18credited to the fund. Notwithstanding section 8.33, moneys
19that remain unencumbered or unobligated at the end of the
20fiscal year shall not revert but shall remain available for the
21same purpose in the succeeding fiscal year.
223. The authority shall develop an application process to
23receive a grant from the fund. To be eligible to receive a
24grant, all of the following must be true:
25a. The applicant must be a nonprofit organization, with its
26primary office located in Iowa, that focuses on homeownership
27lending.
28b. The applicant must be certified by the federal
29department of the treasury as a community development financial
30institution loan fund.
314. A loan provided from the grant moneys shall be limited to
32persons whose income is less than one hundred twenty percent of
33the latest area median income of the region as calculated by
34the federal department of housing and urban development.
355. Moneys granted from the fund may be used for mortgage
-1-1or home repair loans, educational opportunities for borrowers,
2loan loss reserves, and reasonable administrative expenses.
3The authority may also provide loans, in an intermediary
4capacity, to other nonprofit housing organizations that provide
5mortgage or home repair loans and educational opportunities
6for borrowers meeting the criteria in subsection 4. At least
7one-half of the grants available in the fund shall be provided
8to applicants serving rural communities.
96. The authority shall adopt rules pursuant to chapter 17A
10necessary to implement and administer this section, including
11but not limited to eligibility requirements for financial
12institutions or other lenders to receive funding through the
13home loan program fund. The authority shall use no more than
14five percent of moneys allocated for program administration.
15 Sec. 2. NEW SECTION. 16.52 Housing renewal program fund.
161. A housing renewal program fund is created in the
17state treasury under the control of the authority. The fund
18shall consist of moneys appropriated to or deposited in the
19fund. Moneys in the fund are appropriated to the authority
20to establish and administer a housing renewal program. Under
21the program, the authority shall provide grants to eligible
22participants for purposes of acquisition, rehabilitation, and
23resale of ownership units and the acquisition and demolition
24of blighted structures and redevelopment of ownership units.
25Moneys transferred by the authority for deposit in the housing
26renewal program fund, moneys appropriated to the housing
27renewal program fund, and any other moneys available to and
28obtained or accepted by the authority for placement in the
29housing renewal program fund shall be deposited in the fund.
30Additionally, payment of interest, recaptures of awards, and
31other repayments to the housing renewal program fund shall be
32deposited in the fund.
332. Notwithstanding section 12C.7, subsection 2, interest or
34earnings on moneys in the housing renewal program fund shall
35be credited to the fund. Notwithstanding section 8.33, moneys
-2-1that remain unencumbered or unobligated at the end of the
2fiscal year shall not revert but shall remain available for the
3same purpose in the succeeding fiscal year.
43. Twenty-five percent of moneys appropriated to the fund
5shall be allocated to rural communities in the eighty-eight
6least populated counties in the state.
74. a. A city, county, a consortium of local governments, an
8organization exempt from taxation pursuant to section 501(c)(3)
9of the Internal Revenue Code, and a housing trust fund are
10eligible to receive a grant from the fund for a project that
11meets a purpose described in subsection 1 and that is any of
12the following:
13(1) Rehabilitation activities that equal or exceed
14twenty-five thousand dollars and are substantial to the human
15health, safety, and energy efficiency of the unit.
16(2) Demolition of a blighted structure that exhibits
17objectively determinable signs of deterioration sufficient
18to constitute a threat to human health, safety, and public
19welfare.
20b. The grantee will determine the geographic location of the
21project.
22c. The authority shall not award a grantee more than
23one million dollars. The grantee shall not use more than
24one hundred thousand dollars per ownership unit on the
25project. A grantee may use up to ten percent of the grant for
26administration of the project.
27d. (1) The grantee shall have thirty-six months from the
28date of the signed contract between the authority and the
29grantee to complete the project. A project will be considered
30completed when the funds have been expended and the ownership
31units are finished and available for sale.
32(2) If a grantee has no project activity within thirty-six
33months from the date of the signed contract between the
34authority and the grantee, the grant award shall be returned to
35the authority for deposit in the housing renewal program fund.
-3- 1e. The grantee shall sell the renewed ownership unit to
2a homebuyer whose income is under the one hundred twenty
3percent area median income and who will occupy the ownership
4unit as the homebuyer’s primary residence. The deed to the
5ownership unit must contain a restrictive resale requirement
6that prohibits the buyer or a subsequent owner from selling the
7ownership unit to a person with an income above the one hundred
8twenty percent area median income for five years from the date
9the grantee sold the ownership unit.
105. A grantee may use income generated from the sale of
11ownership units only for the purpose of additional program
12eligible expenses.
136. The authority shall adopt rules pursuant to chapter
1417A necessary to implement and administer this section. The
15authority shall not use more than five percent of moneys
16allocated to the fund for administration of the program.
17 Sec. 3. Section 541A.2, subsection 1, paragraph a, Code
182022, is amended to read as follows:
19a. To be eligible to open an account, a prospective account
20holder must have a household income that is equal to or less
21than two hundred fifty percent of the federal poverty level and
22has completed a financial counseling curriculum.
23 Sec. 4. Section 541A.2, Code 2022, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 10. An account holder may make withdrawals
26from the account holder’s account for up to three years from
27the date the account is opened.
28 Sec. 5. DEPARTMENT OF HUMAN RIGHTS — INDIVIDUAL
29 DEVELOPMENT ACCOUNT STATE MATCH FUND — APPROPRIATION.
30Notwithstanding the purpose described in section 541A.7,
31subsection 2, there is appropriated to the individual
32development account state match fund created in section 541A.7
33the following amount, or so much thereof as is necessary, for
34the promotion of affordable homeownership and to increase
35self-reliance among individual development account holders and
-4-1potential account holders:
.................................................. $21,000,000
3 Sec. 6. HOME LOAN PROGRAM FUND — TRANSFER. There is
4transferred from the general fund of the state to the home
5loan program fund created in section 16.43 for the fiscal year
6beginning July 1, 2022, and ending June 30, 2023, the following
7amount:
.................................................. $825,000,000
9 Sec. 7. HOUSING RENEWAL PROGRAM FUND — TRANSFER. There is
10transferred from the general fund of the state to the housing
11renewal program fund for the fiscal year beginning July 1,
122022, and ending June 30, 2023, the following amount:
.................................................. $1325,000,000
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill requires the Iowa finance authority (authority) to
18establish a home loan program fund for the purpose of providing
19and fostering lending programs and other services to facilitate
20mortgage and repair loans to low-income and moderate-income
21homebuyers and homeowners, creates a housing renewal program
22to invest in housing rehabilitation and redevelopment in
23this state, and also makes changes to individual development
24accounts.
25The bill provides that the home loan program fund shall
26include a forgivable loan program for qualifying home
27improvements, repairs, and renovations for an owner-occupied
28home. The bill requires the authority to adopt rules governing
29the loan program and specifies the types of improvements,
30repairs, and renovations authorized for the program. An
31applicant is eligible to receive a grant from the home loan
32program fund if the applicant is a nonprofit organization,
33with its primary office located in Iowa, that focuses on
34homeownership lending and the applicant is certified by the
35federal department of the treasury as a community development
-5-1financial institution loan fund. A loan provided from the
2grant shall be limited to persons whose income is less than 120
3percent of the latest area median income of the region. The
4program shall earmark half of the moneys allocated to the fund
5to serve rural communities.
6The bill provides for a transfer of $25 million from the
7general fund of the state to the home loan program fund
8intended to be used for purposes of the home loan program.
9The bill provides that all moneys in the fund which remain
10unexpended or unobligated at the close of a fiscal year shall
11not revert but shall remain available in subsequent fiscal
12years. The program may use up to 5 percent of the moneys
13allocated for program administration.
14The bill creates the housing renewal program fund within
15the authority. The program shall provide grants to a city,
16county, a consortium of local governments, nonprofit 501(c)(3)
17organization, or housing trust fund to acquire, rehabilitate,
18or demolish blighted structures, and redevelop ownership units
19with 25 percent of moneys appropriated to the fund earmarked
20for rural communities in the 88 least populated counties in
21the state. An approved project must be a rehabilitation
22activity estimated to cost $25,000 or more and be substantial
23to the human health, safety, and energy efficiency of the unit
24or a demolition of a blighted structure that is a threat to
25human health, safety, and public welfare. A grant may be no
26more than $1 million and a project shall not spend more than
27$100,000 in the rehabilitation of a single ownership unit. A
28grantee has three years, to complete the project and sell the
29rehabilitated or new affordable housing ownership units, and if
30there has been no progress on an approved project within three
31years the grantee shall return the grant award money to the
32authority to be returned to the housing renewal program fund.
33When selling a completed ownership unit, the grantee must sell
34the unit to a homebuyer purchasing a primary residence that is
35under the 120 percent area median income with a covenant that
-6-1restricts the buyer from selling the unit to a person with an
2income that exceeds 120 percent of the area median income for
3five years.
4The bill provides for a transfer of $25 million from the
5general fund of the state to the housing renewal program fund.
6The bill provides that all moneys in the fund which remain
7unexpended or unobligated at the close of a fiscal year shall
8not revert but shall remain available in subsequent fiscal
9years. The program may use up to 5 percent of the moneys
10allocated for program administration.
11Individual development accounts are matched savings accounts
12that can typically be used only for purchasing a first home,
13capitalizing a small business, or educational or job training
14expenses to enable low-income families to save, build assets,
15and develop financial independence. Accounts are held at local
16financial institutions.
17The bill changes the eligibility requirements for an
18individual development account by providing that a person must
19have household income that is equal to or less than the 250
20percent federal poverty level and has completed a financial
21counseling curriculum. Under current law, a person’s household
22income has to be at or below the 200 percent of the federal
23poverty level and there is no requirement to complete a
24financial counseling curriculum.
25The bill provides that an account holder may use the
26individual development account for up to three years.
27The bill provides for a $1 million appropriation in order
28to promote affordable homeownership to low-income Iowans. The
29Iowa development accounts program has not received new funding
30in several years and previous funding has gone primarily to
31homeownership.
-7-cm/jh