Relating to homeownership by creating the home loan program fund and the housing renewal program fund within the Iowa finance authority and amending qualifications for individual development accounts, and making appropriations and transfers

The bill requires the authority to adopt rules governing the loan program and specifies the types of improvements, repairs, and renovations authorized for the program. An applicant is eligible to receive a grant from the home loan program fund if the applicant is a nonprofit organization, with its primary office located in Iowa, that focuses on homeownership lending and the applicant is certified by the federal department of the treasury as a community development financial institution loan fund. A loan provided from the grant shall be limited to persons whose income is less than 120 percent of the latest area median income of the region. The program shall earmark half of the moneys allocated to the fund to serve rural communities. The bill provides for a transfer of $25 million from the general fund of the state to the home loan program fund intended to be used for purposes of the home loan program. The bill provides that all moneys in the fund which remain unexpended or unobligated at the close of a fiscal year shall not revert but shall remain available in subsequent fiscal years. The program may use up to percent of the moneys allocated for program administration. The bill creates the housing renewal program fund within the authority. The program shall provide grants to a city, county, a consortium of local governments, nonprofit 501(c)(3) organization, or housing trust fund to acquire, rehabilitate, or demolish blighted structures, and redevelop ownership units with percent of moneys appropriated to the fund earmarked for rural communities in the least populated counties in the state. An approved project must be a rehabilitation activity estimated to cost $25,000 or more and be substantial to the human health, safety, and energy efficiency of the unit or a demolition of a blighted structure that is a threat to human health, safety, and public welfare. A grant may be no more than $1 million and a project shall not spend more than $100,000 in the rehabilitation of a single ownership unit. A grantee has three years, to complete the project and sell the rehabilitated or new affordable housing ownership units, and if there has been no progress on an approved project within three years the grantee shall return the grant award money to the authority to be returned to the housing renewal program fund. When selling a completed ownership unit, the grantee must sell the unit to a homebuyer purchasing a primary residence that is under the 120 percent area median income with a covenant that restricts the buyer from selling the unit to a person with an income that exceeds 120 percent of the area median income for five years. The bill provides for a transfer of $25 million from the general fund of the state to the housing renewal program fund. The bill provides that all moneys in the fund which remain unexpended or unobligated at the close of a fiscal year shall not revert but shall remain available in subsequent fiscal years. The program may use up to percent of the moneys allocated for program administration. Individual development accounts are matched savings accounts that can typically be used only for purchasing a first home, capitalizing a small business, or educational or job training expenses to enable low-income families to save, build assets, and develop financial independence. Accounts are held at local financial institutions. The bill changes the eligibility requirements for an individual development account by providing that a person must have household income that is equal to or less than the 250 percent federal poverty level and has completed a financial counseling curriculum. Under current law, a person’s household income has to be at or below the 200 percent of the federal poverty level and there is no requirement to complete a financial counseling curriculum. The bill provides that an account holder may use the individual development account for up to three years. The bill provides for a $1 million appropriation in order to promote affordable homeownership to low-income Iowans. The Iowa development accounts program has not received new funding in several years and previous funding has gone primarily to homeownership.