Date of enactment: June 22, 2023
2023 Assembly Bill 265 Date of publication*: June 23, 2023
2023 WISCONSIN ACT 15
AN ACT to create 234.661 of the statutes; relating to: a main street housing rehabilitation revolving loan fund and
loan program.
The people of the state of Wisconsin, represented in
senate and assembly, do enact as follows:
SECTION 1. 234.661 of the statutes is created to read:
234.661 Main street housing rehabilitation
revolving loan fund and loan program. (1) DEFINI-
TIONS. In this section:
(a) “Area median income” means the area median
family income in the county in which the housing is
located, adjusted for family size, as published annually
by the federal department of housing and urban develop-
ment.
(b) “Eligible political subdivision” means the city,
village, town, or county having jurisdiction of an eligible
project, as determined by the authority.
(c) “Eligible project” means a project for housing
rehabilitation of existing workforce housing that satisfies
all of the following conditions:
1. Is located on the 2nd or 3rd floor of an existing
2−story or 3−story building with a commercial use on the
main floor, if the space in the building that is devoted to
a commercial use constitutes no more than two−thirds of
the building’s gross square footage.
2. Is located in a building that was constructed at least
40 years prior to the date of application under sub. (3) (b).
3. Has not been significantly improved for at least 20
years prior to the date of application under sub. (3) (b),
as determined by the authority.
4. Is vacant or has been underutilized, as determined
by the authority.
5. Has not been the subject of a claim for a state or
federal historic rehabilitation tax credit, as determined by
the authority.
6. Has not received financial assistance from tax
increments generated by an active tax incremental dis-
trict.
(d) “Housing rehabilitation” means that portion of an
improvement to rental housing that relates to an eligible
project if the improvement is to maintain the housing in
a decent, safe, and sanitary condition or to restore it to
that condition, including any of the following:
1. Repairing or replacing a heating system, electrical
system, internal plumbing system, interior wall or ceil-
ing, roof, window, exterior door, or flooring.
2. Repairing or replacing insulation or siding.
3. Remediating lead paint, asbestos, or mold in
accordance with applicable local, state, and federal laws
and regulations.
(e) “Rental housing” means single−family or multi-
family housing offered or intended to be offered for rent
that is subject to taxation under ch. 70.
(f) “Workforce housing” means rental housing to
which all of the following apply:
1. The estimated annual housing costs, as defined
under s. 16.301 (3), do not exceed, or are not expected to
* Section 991.11, WISCONSIN STATUTES: Effective date of acts. “Every act and every portion of an act enacted by the legislature over the governor’s
partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication.” − 2 −2023 Wisconsin Act 15 2023 Assembly Bill 265
exceed, 30 percent of 100 percent of the area median
income, with family size determined using the federal
imputed income limitation, as defined in 26 USC 42 (g)
(2) (C), and the utility−related costs if not included in the
rent equal the utility allowance determined by the federal
department of housing and urban development.
2. The housing is for occupancy by individuals
whose annual household income does not exceed 100
percent of the area median income.
(2) ESTABLISHMENT OF FUND. (a) There is established
under the jurisdiction and control of the authority a main
street housing rehabilitation revolving loan fund, for the
purpose of providing loans under sub. (3). The authority
may use moneys in the fund to cover actual and necessary
expenses, including marketing expenses under sub. (4),
incurred to accomplish the purposes of this section and
administer the fund. The fund shall consist of all of the
following:
1. All moneys appropriated to the authority for the
fund.
2. All moneys received from the repayment of loans
under sub. (3).
(am) In its discretion, the authority may invest fund
moneys that are not required for immediate use or dis-
bursement in all of the following to the extent lawful for
fiduciaries in this state:
1. An obligation of the United States or one of its
agencies or instrumentalities, or an obligation the princi-
pal and interest of which are guaranteed by the United
States or one of its agencies or instrumentalities.
2. An obligation of any state, or of any county, city,
or other political subdivision of a state, having long−term
ratings in the AA category or higher.
3. A certificate of deposit.
4. The state investment fund.
5. A money market mutual fund restricted to one or
more investments as provided in subd. 1., 2., 3., or 4.
(an) All investments under par. (am) shall be the
exclusive property of the fund. All earnings on or income
from such investments shall be credited to the fund.
(b) Of the amounts deposited in the fund under par.
(a) 1. in the 2023−25 fiscal biennium, the authority shall
return to the secretary of administration for deposit in the
general fund all such amounts not encumbered or
expended for an eligible project as of the first day of the
8th year beginning after the effective date of this para-
graph .... [LRB inserts date].
(c) No moneys in the fund may be invested under s.
234.03 (18).
(3) ESTABLISHMENT AND ADMINISTRATION OF REVOLV-
ING LOAN PROGRAM. (a) The authority shall establish and
administer a main street housing rehabilitation revolving
loan program for the purpose of awarding loans under
this subsection.
(b) From the main street housing rehabilitation
revolving loan fund, the authority may award loans to
owners of rental housing to cover housing rehabilitation
costs for an eligible project. Any owner of rental hous-
ing, other than a city, village, town, or county, may apply
to the authority for a loan in accordance with the applica-
tion process established by the authority under par. (c),
but the authority may not award the loan unless the owner
of the rental housing and eligible political subdivision
demonstrate to the satisfaction of the authority in one or
more forms prescribed by the authority that all of the fol-
lowing apply:
1. The owner has secured the necessary financial
resources for the total cost of the housing rehabilitation
project not to be covered by a loan from the authority
under this subsection.
2. The owner has secured all applicable federal, state,
and local government permits or other approvals for the
eligible project.
3. The eligible political subdivision has reduced the
cost of rental housing in connection with the eligible
project by voluntarily revising zoning ordinances, subdi-
vision regulations, or other land development regulations
to increase development density, expedite approvals,
reduce impact fees, or reduce parking, building, or other
development costs with respect to the eligible project.
For purposes of this subdivision, the political subdivision
in cooperation with the owner shall submit to the author-
ity a cost reduction analysis in a form prescribed by the
authority and signed by the owner and the head of the
political subdivision’s governing body that shows the
cost reduction measures, including time saving mea-
sures, undertaken by the political subdivision on or after
January 1, 2023, that have reduced the cost of rental hous-
ing in connection with the eligible project. The signed
analysis shall clearly show for each time saving or cost
reduction measure the estimated time or dollar amount
saved by the owner and the estimated percentage reduc-
tion in rental housing costs.
4. The eligible political subdivision is in compliance
with the requirements under ss. 66.1001, 66.10013, and
66.10014, to the extent those requirements apply to the
political subdivision.
5. The eligible political subdivision has updated the
housing element of its comprehensive plan under s.
66.1001 (2) (b) within the 5 years immediately preceding
the date of the loan application.
(c) The authority shall establish a semiannual appli-
cation process for the award of loans under this subsec-
tion. If in any application cycle there are insufficient
moneys available in the main street housing rehabilita-
tion revolving loan fund to fund all applications that meet
the requirements under par. (b) and are otherwise accept-
able to the authority, the authority shall prioritize funding
loans for eligible projects in eligible political subdivi-
sions that have reduced the cost of rental housing as
described in par. (b) 3. but with respect to the political
subdivision as a whole. − 3 − 2023 Wisconsin Act 15 2023 Assembly Bill 265
(d) No loan awarded under this subsection may
exceed $20,000 per dwelling unit or 25 percent of the
total housing rehabilitation project costs, whichever is
less, and the authority may establish an interest rate for
any loan awarded under this subsection at or below the
market interest rate or may charge no interest.
(e) The authority shall set aside 30 percent of all mon-
eys deposited in the fund under sub. (2) (a) 1. in the
2023−25 fiscal biennium for a period of not less than 4
years following the effective date of this paragraph ....
[LRB inserts date], for loans under this subsection to
owners of rental housing for eligible projects in cities,
villages, and towns with a population of 10,000 or less.
For purposes of this paragraph, if a single loan supports
eligible projects in more than one city, village, or town,
the amount of such loan attributable to any one city, vil-
lage, or town shall be calculated by prorating the loan
amount between the cities, villages, and towns based on
the number of rental housing units supported by the loan.
(f) 1. The authority and each owner receiving a loan
under this subsection shall enter into an agreement estab-
lishing the term and other conditions of the loan. The
agreement shall include, and give the authority the power
to enforce, all of the following requirements:
a. That the full amount of the loan shall become due
upon the owner’s sale of the rental housing rehabilitated
with loan proceeds.
b. That all rental housing rehabilitated with loan pro-
ceeds shall remain workforce housing for a period com-
mencing on the date of the loan and concluding 10 years
following initial occupancy of all of the rental units of the
housing rehabilitated with loan proceeds. This restric-
tion shall be recorded against the rental property with the
applicable register of deeds and shall run with the land.
c. That the owner of the rental housing, for a period
commencing on the date of the loan and concluding 10
years following initial occupancy of all of the rental units
rehabilitated using loan proceeds, shall annually submit
to the authority a certified rent roll for the housing that
sets forth for each rental unit the monthly rent required
under the lease, the actual monthly rent received for the
preceding year, and an identification of the utilities and
their amounts included in the rent. This restriction shall
be recorded against the residential property with the
applicable register of deeds and shall run with the land.
The authority shall use the information provided under
this subd. 1. c. to confirm that the rental housing contin-
ues to meet the housing costs limitation for purposes of
sub. (1) (f) 1. The authority shall calculate the applicable
monthly limitation on housing costs for each year by
dividing the area median income for the year by 12, with
family size determined using the federal imputed income
limitation, as defined in 26 USC 42 (g) (2) (C). If in any
year the area median income has decreased compared to
the prior year, the applicable housing cost limitation shall
be calculated based on the most recent area median
income information prior to such decrease. The authority
shall keep confidential all information an owner of rental
housing submits to the authority under this subd. 1. c.
d. If the rental housing to be rehabilitated with loan
proceeds contains lead paint, asbestos, or mold, the
authority’s loan agreement with the owner shall require
the owner to remediate the hazardous material or condi-
tion as required by and in accordance with local, state,
and federal laws or regulations.
2. Any restriction recorded against the property
under subd. 1. shall terminate on the date the property is
acquired by foreclosure, or by an instrument in lieu of
foreclosure, unless the authority determines that the
acquisition is part of an arrangement a purpose of which
is to terminate the restriction.
(g) In addition to other criteria explicitly provided for
under this subsection, in awarding each loan under this
subsection, the authority shall take into account only the
following in descending order of priority:
1. Credit risk, collateral, and the need for a loan guar-
antee.
2. The estimated reduction in housing costs.
3. The need for workforce housing in the area.
(3m) POLICIES AND PROCEDURES. The authority shall
establish policies and procedures to administer the main
street housing rehabilitation revolving loan fund and pro-
gram under this section. The policies and procedures
shall, to the extent practicable, do all of the following:
(a) Incorporate the authority’s policies and proce-
dures for establishing credit underwriting guidelines.
(b) Require that the full amount of each loan under
sub. (3) is secured by one or more unlimited personal
guarantees, unless the developer provides no personal
guarantee on any first mortgage for the eligible project
and the developer’s total debt associated with project
does not exceed 75 percent of the total collateral value of
the project, as determined by the authority.
(c) Establish loan repayment requirements.
(4) MARKETING. The authority shall establish and
administer a marketing program to advertise the loans
available under this section.
(5) ANNUAL REPORTS. Beginning in 2024, no later
than August 1 of each year, the authority shall submit to
the joint committee on finance and under s. 13.172 (3) to
the standing committees of the legislature having juris-
diction over matters related to housing a report that
includes all of the following:
(a) A statement of the condition and balance of the
main street housing rehabilitation revolving loan fund.
(b) Information concerning each loan awarded under
sub. (3), including all of the following:
1. The date, amount, amortization period, and current
status of the loan.
2. An identification of the owner of rental housing
receiving the loan. − 4 −2023 Wisconsin Act 15 2023 Assembly Bill 265
3. A description of the eligible project funded with
the loan.
4. An identification of the eligible political subdivi-
sion with respect to which the loan was awarded.
(c) The number of dwelling units rehabilitated to date
as a result of the loan program and the locations and sale
or estimated sale or rental prices of the dwelling units.