1.1 A bill for an act
1.2 relating to housing; establishing a locally controlled housing fund; modifying
1.3 allowable uses of housing infrastructure bonds; requiring a report; authorizing the
1.4 sale and issuance of state bonds; appropriating money; amending Minnesota
1.5 Statutes 2024, section 462A.37, subdivision 2; proposing coding for new law in
1.6 Minnesota Statutes, chapter 462A.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 462A.37, subdivision 2, is amended to read:
1.9 Subd. 2.Authorization.(a) The agency may issue up to $30,000,000 in aggregate
1.10principal amount of housing infrastructure bonds in one or more series to which the payment
1.11made under this section may be pledged. The housing infrastructure bonds authorized in
1.12this subdivision may be issued to fund loans, or grants for the purposes of clauses (4) and
1.13(7), on terms and conditions the agency deems appropriate, made for one or more of the
1.14following purposes:
1.15 (1) to finance the costs of the construction, acquisition, and rehabilitation of supportive
1.16housing where at least 50 percent of units are set aside for individuals and families who are
1.17without a permanent residence;
1.18 (2) to finance the costs of the acquisition and rehabilitation of foreclosed or abandoned
1.19housing to be used for affordable rental housing or for affordable home ownership and the
1.20costs of new construction of rental housing on abandoned or foreclosed property where the
1.21existing structures will be demolished or removed;
1.22 (3) to finance that portion of the costs of acquisition of property that is attributable to
1.23the land to be leased by community land trusts to low- and moderate-income home buyers;
1Section 1.
REVISOR MS/KR 25-0481303/13/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2693
NINETY-FOURTH SESSION
Authored by Agbaje03/24/2025
The bill was read for the first time and referred to the Committee on Housing Finance and Policy 2.1 (4) to finance the acquisition, improvement, and infrastructure of manufactured home
2.2parks under section 462A.2035, subdivision 1b;
2.3 (5) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
2.4of senior housing;
2.5 (6) to finance the costs of acquisition, rehabilitation, and replacement of federally assisted
2.6rental housing and for the refinancing of costs of the construction, acquisition, and
2.7rehabilitation of federally assisted rental housing, including providing funds to refund, in
2.8whole or in part, outstanding bonds previously issued by the agency or another government
2.9unit to finance or refinance such costs;
2.10 (7) to finance the costs of acquisition, rehabilitation, adaptive reuse, or new construction
2.11of single-family housing;
2.12 (8) to finance the costs of construction, acquisition, and rehabilitation of permanent
2.13housing that is affordable to households with incomes at or below 50 percent of the area
2.14median income for the applicable county or metropolitan area as published by the United
2.15States Department of Housing and Urban Development, as adjusted for household size; and
2.16 (9) to finance the costs of construction, acquisition, rehabilitation, conversion, and
2.17development of cooperatively owned housing created under chapter 308A, 308B, or 308C
2.18that is affordable to low- and moderate-income households.
2.19 (b) Among comparable proposals for permanent supportive housing, preference shall
2.20be given to permanent supportive housing for veterans and other individuals or families
2.21who:
2.22 (1) either have been without a permanent residence for at least 12 months or at least four
2.23times in the last three years; or
2.24 (2) are at significant risk of lacking a permanent residence for 12 months or at least four
2.25times in the last three years.
2.26 (c) Among comparable proposals for senior housing, the agency must give priority to
2.27requests for projects that:
2.28 (1) demonstrate a commitment to maintaining the housing financed as affordable to
2.29senior households;
2.30 (2) leverage other sources of funding to finance the project, including the use of
2.31low-income housing tax credits;
2Section 1.
REVISOR MS/KR 25-0481303/13/25 3.1 (3) provide access to services to residents and demonstrate the ability to increase physical
3.2supports and support services as residents age and experience increasing levels of disability;
3.3and
3.4 (4) include households with incomes that do not exceed 30 percent of the median
3.5household income for the metropolitan area.
3.6 (d) To the extent practicable, the agency shall balance the loans made between projects
3.7in the metropolitan area and projects outside the metropolitan area. Of the loans made to
3.8projects outside the metropolitan area, the agency shall, to the extent practicable, balance
3.9the loans made between projects in counties or cities with a population of 20,000 or less,
3.10as established by the most recent decennial census, and projects in counties or cities with
3.11populations in excess of 20,000.
3.12 (e) Among comparable proposals for permanent housing, the agency must give preference
3.13to projects that will provide housing that is affordable to households at or below 30 percent
3.14of the area median income.
3.15 (f) If a loan recipient uses the loan for new construction as defined by the agency on a
3.16building containing more than four units, the loan recipient must construct, convert, or
3.17otherwise adapt the building to include:
3.18 (1) the greater of: (i) at least one unit; or (ii) at least five percent of units that are
3.19accessible units, and each accessible unit includes at least one roll-in shower, water closet,
3.20and kitchen work surface meeting the requirements of section 1002 of the current State
3.21Building Code Accessibility Provisions for Dwelling Units in Minnesota; and
3.22 (2) the greater of: (i) at least one unit; or (ii) at least five percent of units that are
3.23sensory-accessible units that include:
3.24 (A) soundproofing between shared walls for first and second floor units;
3.25 (B) no florescent lighting in units and common areas;
3.26 (C) low-fume paint;
3.27 (D) low-chemical carpet; and
3.28 (E) low-chemical carpet glue in units and common areas.
3.29Nothing in this paragraph relieves a project funded by the agency from meeting other
3.30applicable accessibility requirements.
3.31 (g) Bonds issued pursuant to this section for the acquisition and construction of housing
3.32may be awarded through the locally controlled housing program.
3Section 1.
REVISOR MS/KR 25-0481303/13/25 4.1 Sec. 2. [462A.44] LOCALLY CONTROLLED HOUSING PROGRAM.
4.2 Subdivision 1.Establishment.A locally controlled housing program is established for
4.3the agency to award funding to allow eligible recipients to develop or acquire housing to
4.4be owned by the recipient.
4.5 Subd. 2.Creation of accounts.Two locally controlled housing program accounts are
4.6created. One account is created in the housing development fund and one account is created
4.7in the bond proceeds fund. Money in the accounts is appropriated to the commissioner to
4.8award funding under this section. Money in the accounts is available until encumbered or
4.9spent subject to section 16A.642. Money in the locally controlled housing program account
4.10in the housing development fund consists of money appropriated to the account and
4.11transferred from other sources and all earnings from money in the account, including
4.12repayments on loans awarded under this section.
4.13 Subd. 3.Eligible recipient.(a) A city, as defined in section 462C.02, subdivision 6, or
4.14a county is eligible to apply for and receive a grant from either account established in
4.15subdivision 1.
4.16 (b) A federally recognized American Indian Tribe or a Tribally designated housing entity
4.17is eligible to apply for and receive a grant from the locally controlled housing program
4.18account in the housing development fund.
4.19 Subd. 4.Use of funds; program requirements.(a) An eligible recipient must use the
4.20proceeds for the acquisition of the predesign, design, construction, furnishing, and equipment
4.21of property for use as housing and must maintain ownership of housing funded under this
4.22section for at least 50 years after receipt of the funding.
4.23 (b) In a multifamily property funded under this section, at least 30 percent of the units
4.24must be occupied by households whose income, at the time of application or initial lease
4.25agreement, does not exceed 50 percent of the area median income as published by the United
4.26States Department of Housing and Urban Development, as adjusted for household size, and
4.27at least 30 percent of the units must be occupied by households whose income, at the time
4.28of application or initial lease agreement, does not exceed 100 percent of the area median
4.29income as published by the United States Department of Housing and Urban Development,
4.30as adjusted for household size. At the time of application or initial lease agreement, no
4.31household moving into a multifamily property funded under this section may have an income
4.32greater than 400 percent of the area median income as published by the United States
4.33Department of Housing and Urban Development, as adjusted for household size.
4Sec. 2.
REVISOR MS/KR 25-0481303/13/25 5.1 (c) In single-family property funded under this section, the homes must be occupied by
5.2households with incomes not exceeding 50 percent of the area median income as published
5.3by the United States Department of Housing and Urban Development, as adjusted for
5.4household size.
5.5 (d) An eligible recipient may act as a community land trust with respect to single-family
5.6property funded through the locally controlled housing program account in the housing
5.7development fund, provided that the recipient meets the requirements applying to a city
5.8acting as a community land trust under sections 462A.30 and 462A.31.
5.9 (e) Lease agreements with tenants in housing funded under this section must include all
5.10applicable tenant protections included in public housing lease agreements.
5.11 Subd. 5.Operation of locally controlled housing.Housing funded under this section
5.12may be operated and managed by the eligible recipient or by a third party under a lease and
5.13management contract complying with section 16A.695, subdivision 2. Except when the
5.14proceeds from the housing are pledged for repayment of the awarded funds, a recipient may
5.15use the proceeds only for the acquisition or the predesign, design, construction, furnishing,
5.16and equipment of housing to be used as affordable housing in the recipient's jurisdiction.
5.17 Subd. 6.Administration.(a) To the extent practicable:
5.18 (1) the agency must make funding available so that an approximately equal number of
5.19housing units are financed in the metropolitan area and in the nonmetropolitan area;
5.20 (2) the agency must fund projects that include accessible units, as defined in section
5.211002 of the current State Building Code Accessibility Provisions for Dwelling Units in
5.22Minnesota; and
5.23 (3) the agency must provide technical assistance to eligible recipients seeking to apply
5.24for funding under this section and to award recipients attempting to comply with the
5.25requirements of this section.
5.26 (b) Applications for funding must include a housing needs assessment that identifies the
5.27estimated range of affordability for each project.
5.28 (c) Money in the locally controlled housing program account in the bond proceeds fund
5.29must be awarded as grants. Money in the locally controlled housing development fund must
5.30be awarded as loans. The commissioner must operate the locally controlled housing program
5.31account in the housing development fund as a revolving loan fund.
5.32 Subd. 7.Reports.Beginning January 15, 2026, and each year thereafter, the
5.33commissioner must submit a report to the chairs and ranking minority members of the
5Sec. 2.
REVISOR MS/KR 25-0481303/13/25 6.1legislative committees with jurisdiction over housing finance specifying the projects that
6.2received funding under this section in the prior fiscal year.
6.3 Sec. 3. LOCALLY CONTROLLED HOUSING PROGRAM.
6.4 Subdivision 1.Appropriation.$....... is appropriated from the bond proceeds fund to
6.5the commissioner of the Housing Finance Agency for the locally controlled housing program.
6.6 Subd. 2.Bond sale.To provide the money appropriated in this section from the bond
6.7proceeds fund, the commissioner of management and budget shall sell and issue bonds of
6.8the state in an amount up to $....... in the manner, upon the terms, and with the effect
6.9prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota
6.10Constitution, article XI, sections 4 to 7.
6.11 EFFECTIVE DATE.This section is effective the day following final enactment.
6.12 Sec. 4. APPROPRIATION; LOCALLY CONTROLLED HOUSING PROGRAM.
6.13 $....... in fiscal year 2026 is appropriated from the general fund to the commissioner of
6.14the Housing Finance Agency for the locally controlled housing program.
6Sec. 4.
REVISOR MS/KR 25-0481303/13/25