Workforce Housing Fund Runs Every Dollar Through One Nonprofit

The text as introduced · 1,287 words

89R1830 JG-F

By: Bell of Montgomery
H.B. No. 4505

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the workforce housing capital

investment fund program to fund the development of workforce

housing in this state; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The legislature finds that:

(1) the creation of the workforce housing capital

investment fund and use of the fund under Subchapter EE, Chapter

2306, Government Code, as added by this Act, will substantially

increase the development of workforce housing for households that

earn between 30 and 80 percent of the area median income;

(2) the workforce housing capital investment fund will

enable loan recipients to access needed capital to plan for future

growth;

(3) the creation of more housing options in this state

will:

(A) help stabilize the state economy and local

economies across this state; and

(B) reduce the need for other services provided

by this state and political subdivisions of this state;

(4) skilled construction and trade labor shortages

impact the cost of housing at all income levels; and

(5) the use of the workforce housing capital

investment fund for the purposes of and in the manner described by

Subchapter EE, Chapter 2306, Government Code, as added by this Act,

is:

(A) in furtherance of the public purposes of

mitigating housing deficits and providing housing to a critical

segment of this state's population that is not often served by

for-profit housing; and

(B) for the benefit of both this state and

political subdivisions of this state that are impacted by a lack of

workforce housing to provide to qualified homebuyers.

SECTION 2. Chapter 2306, Government Code, is amended by

adding Subchapter EE to read as follows:

SUBCHAPTER EE. WORKFORCE HOUSING CAPITAL INVESTMENT FUND PROGRAM

Sec. 2306.701. DEFINITIONS. In this subchapter:

(1) "Fund" means the workforce housing capital

investment fund established under this subchapter.

(2) "Program" means the workforce housing capital

investment fund program established under this subchapter.

(3) "Program administrator" means the nonprofit

housing organization with which the department contracts to

administer the program under Section 2306.703.

(4) "Program recipient" means a loan recipient under

the program.

Sec. 2306.702. WORKFORCE HOUSING CAPITAL INVESTMENT FUND.

(a) The workforce housing capital investment fund is a special fund

in the state treasury outside the general revenue fund.

(b) The fund consists of:

(1) gifts, grants, and donations received by this

state for the purposes of the fund;

(2) legislative appropriations for the purposes of

this subchapter;

(3) any fees or other sources of revenue that the

legislature dedicates for deposit to the fund;

(4) repayments of loans made from the fund; and

(5) interest earned on money deposited to the fund.

Sec. 2306.703. PROGRAM ADMINISTRATION. (a) The department

shall contract with a nonprofit housing organization through a

one-time competitive procurement process to administer the program

in accordance with this subchapter.

(b) The nonprofit housing organization with which the

department contracts under this section must be a nonprofit

organization designated as a Section 501(c)(3) organization by the

Internal Revenue Service that:

(1) has a statewide service area with organizational

affiliates;

(2) provides to organizations designated as Section

501(c)(3) organizations training and technical support, resource

development, mortgage services, and disaster preparedness and

response resources;

(3) provides financial literacy education to

low-income homebuyers;

(4) builds single-family residential homes; and

(5) works with homebuyers who contribute to the

construction of their home or the rehabilitation of another

individual's home, including as a certified nonprofit

owner-builder housing program provider under Subchapter FF with not

less than 15 years of experience.

Sec. 2306.704. USE OF FUND. (a) The department shall

provide money from the fund to the program administrator to make and

disburse zero-interest loans to program recipients in accordance

with this subchapter.

(b) Money provided from the fund to program recipients may

be used only to pay the costs associated with the development and

construction of workforce, single-family housing projects

primarily for households that earn between 30 and 80 percent of the

area median income, including:

(1) planning and design costs;

(2) land acquisition costs;

(3) impact fees and permitting costs;

(4) costs associated with flood mitigation, water

quality, and environmental controls; and

(5) costs associated with infrastructure, including

roads, sidewalks, utilities, and broadband service.

(c) Interest earned on money deposited to the fund may be

used by the program administrator for:

(1) program staffing and other related costs

associated with administering the program; and

(2) training programs associated with the purposes of

this subchapter.

Sec. 2306.705. APPLICATION REQUIREMENTS; PROGRAM RECIPIENT

SELECTION. (a) The department shall prescribe the form and manner

for an applicant to apply for a loan under the program.

(b) An application must satisfy the requirements prescribed

by the department and demonstrate that the applicant:

(1) is incorporated under this state's laws as a

nonprofit organization;

(2) is organized for the purpose of building

owner-occupied residential homes for households that earn between

30 and 80 percent of the area median income and has carried out that

purpose for not less than 15 years; and

(3) has experience in providing training and technical

support, resource development, mortgage services, and disaster

preparedness and response resources that expand the applicant's

capacity to serve communities in this state.

(c) The program administrator shall review applications and

select applicants to provide loans to under the program. In

selecting applicants, the program administrator:

(1) shall consider the quality of the application and

the applicant's ability to carry out the purposes of this

subchapter; and

(2) may give priority to applicants that partner with

organizations that provide training opportunities to construction

trade workforce members.

(d) The program administrator may require an applicant to

pay an origination fee on a loan application.

Sec. 2306.706. ANNUAL REPORT; INTERNET POSTING. (a) The

program administrator shall prepare and submit to the department an

annual report on the program. The report must include:

(1) information on the program recipients that

received a loan under the program during the preceding year;

(2) a description of each workforce housing project

funded by a loan under the program, including:

(A) the project's expected completion date and

information on the progress made during the preceding year toward

completing the project;

(B) the number of families the project is

expected to serve; and

(C) the total amount and repayment status of the

loan; and

(3) other information the department requires.

(b) The department shall post on the department's Internet

website the information submitted to the department under this

section.

Sec. 2306.707. INDEPENDENT FINANCIAL AUDIT. (a) The

program administrator shall annually commission from a certified

public accounting firm an independent financial audit of the

program administrator's financial activities in relation to the

program and the use of money in the fund. The program administrator

shall provide the results of the audit to the department for the

department's review and evaluation.

(b) In the event the department determines from the results

of the audit that money from the fund has not been used in

accordance with the purposes of this subchapter, the department may

require repayment of the money over a period and in the manner the

department requires.

Sec. 2306.708. RULES. The department shall adopt rules to

implement the program and carry out this subchapter, including

rules on:

(1) application procedures and requirements for an

applicant to receive a loan under the program;

(2) the investment of money in the fund; and

(3) the administration of the fund.

SECTION 3. As soon as practicable after the effective date

of this Act, the Texas Department of Housing and Community Affairs

shall adopt rules to implement Subchapter EE, Chapter 2306,

Government Code, as added by this Act.

SECTION 4. This Act takes effect September 1, 2025.