Johnson Workforce Housing Bill Sets Up Low-Interest Loans For Developers

The text as introduced · 596 words

89R11993 JAM-D

By: Johnson
S.B. No. 960

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the workforce housing program by

the Texas Department of Housing and Community Affairs.

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

SECTION 1. Subchapter K, Chapter 2306, Government Code, is

amended by adding Section 2306.2595 to read as follows:

Sec. 2306.2595. WORKFORCE HOUSING PROGRAM. (a) In this

section:

(1) "Fund" means the workforce housing fund.

(2) "Mezzanine real estate loan" has the meaning

assigned by Section 425.1185, Insurance Code.

(3) "Program" means the workforce housing program.

(b) The department shall establish:

(1) the workforce housing program to provide financial

assistance to developers of multifamily housing to facilitate the

construction and rehabilitation of eligible workforce housing

developments in this state; and

(2) a workforce housing advisory committee to assist

the department in implementing this section.

(c) Financial assistance may be awarded for the purposes

described by this section from the fund described by Subsection (f)

to developers in the form of low-interest loans offered below

market rate, which:

(1) must be structured as mezzanine real estate loans;

(2) must be set at a rate that is one percent higher

than the secured overnight financing rate published by the Federal

Reserve Bank of New York or its successor entity; and

(3) may not exceed 20 percent of the initial

construction or rehabilitation costs of the eligible development.

(d) To be eligible for the financial assistance received by

a developer under the program, a workforce housing development:

(1) must consist of new construction or a substantial

rehabilitation of an existing facility;

(2) must reserve at least 75 percent of the units in

the development for occupancy of individuals and families earning

not more than 120 percent of the area median income, adjusted for

family size;

(3) for an income-restricted unit, may not charge rent

in an amount that exceeds 30 percent of the monthly income

restriction described by Subdivision (2); and

(4) must maintain the affordability requirements

described by Subdivisions (2) and (3) for a period of not less than

20 years following the date of receipt of financial assistance

under this section.

(e) The department, in consultation with the workforce

housing advisory committee established under Subsection (b)(2),

shall adopt rules to implement the program, including rules that:

(1) provide criteria for determining which developers

and workforce housing developments may participate in the program;

and

(2) provide a scoring system to prioritize the

developments for which developers may use financial assistance

under the program.

(f) The workforce housing fund is a special account in the

state treasury. The fund consists of:

(1) money appropriated to the board for a purpose of

the fund;

(2) repayment of principal and interest from loans

made from the fund;

(3) money the board transfers to the fund from any

available source;

(4) depository interest allocable to the fund and

other investment returns on money in the fund;

(5) money from gifts, grants, or donations to the

fund; and

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

legislature may dedicate for deposit to the fund.

(g) Financial assistance provided from the fund to a

developer for an eligible workforce housing development must be

spent by the recipient on the development not later than 36 months

after the date the assistance is received.

(h) Money provided from the fund that is not spent as

required by Subsection (g) must be returned to the department and

deposited to the credit of the fund.

SECTION 2. This Act takes effect September 1, 2025.