1.1 A bill for an act
1.2 relating to housing; establishing a locally controlled housing fund; requiring a
1.3 report; appropriating money; proposing coding for new law in Minnesota Statutes,
1.4 chapter 462A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [462A.44] LOCALLY CONTROLLED HOUSING FUND.
1.7 Subdivision 1.Establishment.The locally controlled housing fund is established as a
1.8separate account in the housing development fund. The agency may use the money from
1.9the locally controlled housing fund to assist eligible recipients with acquiring, rehabilitating,
1.10demolishing, or removing existing structures and constructing new housing and for
1.11construction financing, permanent financing, interest rate reduction, refinancing, and gap
1.12financing of housing to increase the amount of an eligible recipient's locally controlled
1.13housing stock.
1.14 Subd. 2.Definitions.(a) For the purposes of this section, the following terms have the
1.15meanings given.
1.16 (b) "Approved partner" means a nonprofit organization or a housing cooperative that
1.17meets all applicable requirements of the agency.
1.18 (c) "City" has the meaning given in section 462C.02, subdivision 6.
1.19 (d) "Community land trust" has the meaning given in section 462A.30, subdivision 8.
1.20 (e) "Eligible household" means a household whose income, at the time of application
1.21or initial lease agreement, does not exceed 400 percent of area median income as published
1.22by the Department of Housing and Urban Development, as adjusted for household size.
1Section 1.
REVISOR MS/ES 25-0319502/14/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2148
NINETY-FOURTH SESSION
Authored by Agbaje, Howard, Kozlowski, Hollins, Her and others03/10/2025
The bill was read for the first time and referred to the Committee on Housing Finance and Policy 2.1 (f) "Eligible recipient" means a city, county, federally recognized American Indian Tribe
2.2or subdivision located in Minnesota, Tribal housing corporation, community land trust, or
2.3local housing authority.
2.4 (g) "Locally controlled housing" means:
2.5 (1) any multifamily or single-family property where the eligible recipient has at least a
2.675 percent controlling stake in ownership of the entire property and the remaining interest
2.7is owned by an approved partner; or
2.8 (2) any multifamily or single-family property where an approved partner owns the
2.9building and the eligible recipient owns the land.
2.10 Subd. 3.Eligible recipient requirements.(a) Eligible recipients may operate and
2.11manage locally controlled housing or may contract with a third party approved by the agency.
2.12 (b) Upon repayment to the locally controlled housing fund of an amount equal to the
2.13initial award, an eligible recipient may retain, reinvest, or otherwise use proceeds from
2.14housing financed by the locally controlled housing fund to further the goals of affordable
2.15housing production or acquisition in the recipient's jurisdiction.
2.16 Subd. 4.Fund requirements and applications.(a) To the extent practicable:
2.17 (1) the agency must make funding available so that an approximately equal number of
2.18housing units are financed in the metropolitan area and in the nonmetropolitan area; and
2.19 (2) the agency must fund projects that include accessible units, as defined in section
2.201002 of the most recent State Building Code Accessibility Provisions for Dwelling Units
2.21in Minnesota.
2.22 (b) In multifamily properties financed under this section, at least 30 percent of the units
2.23must be occupied by households whose income at the time of application or initial lease
2.24agreement does not exceed 50 percent of the area median income as published by the
2.25Department of Housing and Urban Development, as adjusted for household size, and at
2.26least 30 percent of the units must be occupied by households whose income, at the time of
2.27application or initial lease agreement, exceeds 50 percent but does not exceed 100 percent
2.28of the area median income as published by the Department of Housing and Urban
2.29Development, as adjusted for household size. The agency may approve alternative rent and
2.30income limits.
2.31 (c) Applications for funding must include a housing needs assessment that identifies the
2.32estimated range of affordability for each project.
2Section 1.
REVISOR MS/ES 25-0319502/14/25 3.1 Subd. 5.Use of funds.The agency shall establish the locally controlled housing fund
3.2as a revolving loan fund to make loans to eligible recipients for financing the acquisition,
3.3rehabilitation, adaptive reuse, or new construction of locally controlled housing. Locally
3.4controlled housing financed in part or whole through the locally controlled housing fund
3.5must meet the following requirements:
3.6 (1) all housing must meet applicable accessibility requirements;
3.7 (2) no feature of the housing, including the design, construction, or location, may have
3.8the effect of segregating or otherwise separating residents based on income level or the
3.9amount of rent paid;
3.10 (3) eligible recipients must maximize the affordability of rental units in locally controlled
3.11housing based on the housing needs identified by the recipient in its application for assistance
3.12under this section;
3.13 (4) for single-family homes, locally controlled housing must be occupied by households
3.14with incomes at or below 50 percent of the area median income for the applicable county
3.15or metropolitan area as published by the Department of Housing and Urban Development,
3.16as adjusted for household size; and
3.17 (5) lease agreements signed with eligible households must include all applicable tenant
3.18protections included in public housing lease agreements.
3.19 Subd. 6.Sale of locally controlled housing.(a) An eligible recipient must not sell its
3.20ownership stake of locally controlled housing financed with money from this section unless
3.21approved by the agency.
3.22 (b) Upon sale of its ownership stake, an eligible recipient must repay the locally controlled
3.23housing fund any outstanding balance.
3.24 Subd. 7.Administration.The agency must employ at least one full-time equivalent
3.25staff to serve as the director of the locally controlled housing fund. The director of the fund
3.26shall work with eligible recipients to ensure compliance with all requirements under this
3.27section and provide outreach to new eligible recipients.
3.28 Subd. 8.Annual reports.Beginning January 15, 2026, the commissioner must annually
3.29submit a report to the chairs and ranking minority members of the legislative committees
3.30with jurisdiction over housing specifying the projects that receive funding under this section
3.31and the specific purposes for which the money was spent.
3Section 1.
REVISOR MS/ES 25-0319502/14/25 4.1 Sec. 2. APPROPRIATION; LOCALLY CONTROLLED HOUSING FUND.
4.2 $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
4.3the Housing Finance Agency to create, fund, and administer a locally controlled housing
4.4fund under Minnesota Statutes, section 462A.44.
4Sec. 2.
REVISOR MS/ES 25-0319502/14/25