SB 2341

Effective January 1, 2027, this bill establishes the first-time homebuyer assistance program to be administered by the housing development agency ("agency"") . Subject to appropriations by the general assembly and gifts, grants, and other donations received by the agency for the program, the agency must distribute program funds to first-time homebuyers to provide support for the purchase of qualifying residential units. ""QUALIFIED RESIDENTIAL UNIT"" DEFINED As used in this bill, a "" q ualifying residential unit"" means a house, condominium, townhouse, similar residential structure that serves as a one-unit dwelling or forms part of a two-unit dwelling, or manufactured home or modular home that is attached to a permanent foundation (together, ""residential unit"") that meets all of the following criteria:  Is l ocated in th is state .  Is n ew construction or newly constructed but not yet inhabited .  Is f inanced by a qualifying mortgage loan .  Is o wner-occupied within 60 days of purchase, or in the case of a two-unit dwelling, at least one unit is owner-occupied within 60 days of purchase .  Purchased for an amount that does not exceed (i) $ 450, 000 or (ii) if applicable, the maximum purchase price established by the agency under this bill. AMOUNT AND USE OF PROGRAM FUNDS This bill sets t he maximum amount of program funds that a first-time homebuyer may receive under the program at $20, 000. A recipient may use program funds to pay for ( i ) t he down payment on a qualifying residential unit, ( ii ) c losing costs associated with the purchase of a qualifying residential unit, or ( iii ) a permanent reduction in the advertised par interest rate on a qualifying mortgage loan that is used to finance a qualifying residential unit. However, a recipient must not receive a payout or distribution of program funds upon closing, and t he agency may use up to 5% of program funds for administration PROHIBITION ON BUILDERS AND DEVELOPERS This bill prohibits the builder or developer of a qualifying residential unit from increas ing the price of the qualifying residential unit on the basis of program funds being used toward the purchase of that qualifying residential unit. ADJUSTMENT TO MAXIMUM PURCHASE PRICE This bill authorizes the agency to adjust the maximum purchase price of a qualifying residential unit for which a first-time homebuyer qualifies to receive program funds in order to reflect current market conditions. However, t he agency must not adjust a maximum purchase price more frequently than once per calendar year. In connection with such an adjustment, the agency may establish one or more maximum purchase prices corresponding by residential unit type, geographic location, or any other relevant factor. REPAYMENT UPON SALE I f the recipient sells the qualifying residential unit or refinances the qualifying mortgage loan that was used to finance the purchase before the end of the original term of the qualifying mortgage loan, then this bill generally requires the recipient to repay to the agency an amount equal to the lesser of (i) t he amount of program funds the recipient received or (ii) 50% of the recipient's home equity amount. However, such provision does not apply to a qualifying mortgage loan that is refinanced with a new qualifying mortgage loan if any subordinate qualifying mortgage loan, or loan from program funds used on the purchase of the qualifying residential unit, is resubordinated only to the new qualifying mortgage loan. Any funds so repaid must be used for program distributions. ANNUAL REPORT This bill requires t he agency to report annually to legislative committees having jurisdiction over budget-related matters on disbursements from the program and any adjustments made to the maximum purchase price or maximum purchase prices of a qualifying residential unit under this bill. RULEMAKING This bill requires the agency to promulgate rules governing the application form, process, and criteria the agency will use to distribute program funds to first-time homebuyers."