Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB619 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 619
5	5	November 8, 2023 - Introduced by Representatives GOYKE, MOORE OMOKUNDE,
6	6	BALDEH, OHNSTAD, CABRERA, HONG, JOERS, STUBBS, SUBECK, BILLINGS,
7	7	SHANKLAND, BARE, PALMERI, SINICKI, C. ANDERSON, MADISON, CLANCY and
8	8	JACOBSON, cosponsored by Senators L. JOHNSON, HESSELBEIN, ROYS, LARSON,
9	9	WIRCH and AGARD. Referred to Committee on Housing and Real Estate.
10	10	*AUTHORS SUBJECT TO CHANGE*
11	11	AN ACT to create 20.490 (3) (fq), 20.490 (3) (gq) and 234.665 of the statutes;
12	12	relating to: a revolving workforce home loan program and making an
13	13	appropriation.
14	14	Analysis by the Legislative Reference Bureau
15	15	This bill establishes a revolving loan program administered by the Wisconsin
16	16	Housing and Economic Development Authority for the purpose of issuing loans,
17	17	which the bill terms “workforce home loans,” to eligible applicants to provide gap
18	18	financing to supplement a conventional mortgage for the purchase of a single-family
19	19	home in Wisconsin that is or will be the eligible applicant's primary residence. The
20	20	bill appropriates $100,000,000 for the program and requires WHEDA to use
21	21	repayments of loans to fund additional loans under the program. The bill authorizes
22	22	WHEDA to establish an interest rate for any workforce home loan that is below the
23	23	market interest rate or to charge no interest.
24	24	Under the bill, a local housing authority or community-based organization or
25	25	other qualified local organization, as determined by WHEDA, certifies a loan
26	26	applicant to WHEDA, subject to WHEDA's approval. An applicant is eligible for a
27	27	workforce home loan under the bill if all of the following are satisfied:
28	28	1. The applicant is an individual applying for the loan as a head of household,
29	29	as determined by WHEDA.
30	30	2. The applicant has not had any ownership interest in residential real
31	31	property for the three consecutive years immediately preceding the date of the
32	32	application.
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38	38	3. The applicant's household annual income is less than 120 percent of the area
39	39	median income for the county in which the home is located.
40	40	4. The applicant's housing costs, excluding utility-related costs, in the home
41	41	for which the applicant is applying for a workforce home loan, as determined by the
42	42	qualified organization, will not exceed 30 percent of the applicant's household
43	43	income.
44	44	5. The total amount of the mortgage for which the applicant is applying for a
45	45	workforce home loan does not exceed the conforming loan limit for the county in
46	46	which the home is located, as established by the federal housing finance agency.
47	47	6. The applicant has a satisfactory credit record, history, or rating, as
48	48	determined by the qualified organization in consultation with WHEDA.
49	49	The bill provides that WHEDA may not issue a workforce home loan that
50	50	exceeds $100,000, adjusted for inflation annually beginning on the effective date of
51	51	the bill. The bill requires that the amount of each workforce home loan be based on
52	52	the applicant's household income and size in combination with the amount of funding
53	53	available for the loan.
54	54	The bill establish different repayment rules for workforce home loans
55	55	depending on the eligible applicant's household income. Specifically, if the authority
56	56	issues a workforce home loan to an applicant whose household income is less than
57	57	80 percent of the area median income for the county in which the home is located, all
58	58	of the following apply:
59	59	1. The repayment of principal due on the loan must be deferred until the
60	60	recipient of the workforce home loan sells the home or loses equity in the home as a
61	61	result of refinancing or the home ceases to be the primary residence of the recipient.
62	62	2. Beginning with the sixth full year following the issuance date of the
63	63	workforce home loan, each year WHEDA must forgive 10 percent of the total amount
64	64	of unpaid principal on the loan.
65	65	On the other hand, if WHEDA issues a workforce home loan to an applicant
66	66	whose household income is 80 percent or more of the area median income for the
67	67	county in which the home is located, the repayment of principal on the loan must be
68	68	deferred for the five consecutive years beginning after the date on which the loan is
69	69	issued, immediately after which the loan recipient is required to begin the
70	70	repayment of principal on the loan in monthly installments, or until the recipient of
71	71	the workforce home loan sells the home or loses equity in the home as a result of
72	72	refinancing or the home ceases to be the primary residence of the recipient.
73	73	Because this bill may increase or decrease, directly or indirectly, the cost of the
74	74	development, construction, financing, purchasing, sale, ownership, or availability of
75	75	housing in this state, the Department of Administration, as required by law, will
76	76	prepare a report to be printed as an appendix to this bill.
77	77	For further information see the state and local fiscal estimate, which will be
78	78	printed as an appendix to this bill.
79	79	The people of the state of Wisconsin, represented in senate and assembly, do
80	80	enact as follows: - 3 -2023 - 2024 Legislature
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83	83	SECTION 1
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85	85	SECTION 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
86	86	the following amounts for the purposes indicated:
87	87	2023-24 2024-25
88	88	20.490 Wisconsin Housing and Economic
89	89	Development Authority
90	90	(3) HOMEOWNERSHIP MORTGAGE ASSISTANCE
91	91	(fq) Workforce home loan program GPR C 100,000,000 -0-
92	92	SECTION 2. 20.490 (3) (fq) of the statutes is created to read:
93	93	20.490 (3) (fq) Workforce home loan program. As a continuing appropriation,
94	94	the amounts in the schedule for workforce home loans under s. 234.665.
95	95	SECTION 3. 20.490 (3) (gq) of the statutes is created to read:
96	96	20.490 (3) (gq) Workforce home loan repayments. All moneys received from the
97	97	repayment of workforce home loans made under s. 234.665, to be used for workforce
98	98	home loans under s. 234.665.
99	99	SECTION 4. 234.665 of the statutes is created to read:
100	100	234.665 Workforce home loan program. (1) DEFINITIONS. In this section:
101	101	(a) “Area median income” means the area median family income in the county
102	102	in which the housing is located, adjusted for family size, as published annually by
103	103	the federal department of housing and urban development.
104	104	(b) “Qualified organization” means a housing authority, as defined in s. 16.301
105	105	(2) (a), a community based organization, as defined in s 16.301 (1), or another
106	106	qualified local organization, as determined by the authority.
107	107	(c) “Workforce home loan” means a loan issued by the authority under sub. (3)
108	108	(a).
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134	134	(2) CERTIFICATIONS. (a) A qualified organization may certify an eligible
135	135	applicant to receive a workforce home loan in an amount determined by the qualified
136	136	organization, subject to the approval of the authority.
137	137	(b) An applicant for a workforce home loan is eligible if the applicant satisfies
138	138	all of the following:
139	139	1. The applicant is an individual applying for the loan as a head of household,
140	140	as determined by the authority.
141	141	2. The applicant has not had any ownership interest in residential real
142	142	property for the 3 consecutive years immediately preceding the date of the
143	143	application.
144	144	3. The applicant's household annual income is less than 120 percent of the area
145	145	median income.
146	146	4. The applicant's housing costs, excluding utility-related costs, in the home
147	147	for which the applicant is applying for a workforce home loan, as determined by the
148	148	qualified organization, will not exceed 30 percent of the applicant's household
149	149	income.
150	150	5. The total amount of the mortgage for which the applicant is applying for a
151	151	workforce home loan does not exceed the conforming loan limit for the county in
152	152	which the home is located, as established by the federal housing finance agency.
153	153	6. The applicant has a satisfactory credit record, history, or rating, as
154	154	determined by the qualified organization in consultation with the authority.
155	155	(3) LOAN ISSUANCE. (a) Subject to pars. (b) to (e), from the appropriations under
156	156	s. 20.490 (3) (fq) and (gq), the authority may issue a loan to an eligible applicant
157	157	certified by a qualified organization under sub. (2). The authority may establish an
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184	184	SECTION 4
185	185	ASSEMBLY BILL 619
186	186	interest rate for any workforce home loan that is below the market interest rate or
187	187	may charge no interest.
188	188	(b) The authority may issue a workforce home loan only for the purpose of
189	189	providing gap financing to supplement a conventional mortgage for the purchase of
190	190	a single-family home in this state, whether new construction or an existing home,
191	191	that is or will be the eligible applicant's primary residence.
192	192	(c) The authority may not issue a workforce home loan that exceeds $100,000,
193	193	adjusted for inflation annually beginning on the effective date of this paragraph ....
194	194	[LRB inserts date]. The amount of each workforce home loan shall be based on the
195	195	eligible applicant's household income and size in combination with the amount of
196	196	funding available for the loan.
197	197	(d) If the authority issues a workforce home loan to an eligible applicant whose
198	198	household income is less than 80 percent of the area median income, all of the
199	199	following apply:
200	200	1. The repayment of principal on the loan shall be deferred until any of the
201	201	following occurs, at which time the total amount of unpaid principal on the loan,
202	202	minus the principal forgiven under subd. 2., shall become due and payable:
203	203	a. The recipient of the workforce home loan sells the home.
204	204	b. The recipient of the workforce home loan loses equity in the home as a result
205	205	of refinancing.
206	206	c. The home ceases to be the primary residence of the recipient.
207	207	2. Beginning with the 6th full year following the issuance date of the workforce
208	208	home loan, each year the authority shall forgive 10 percent of the total amount of
209	209	unpaid principal on the loan.
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236	236	(e) If the authority issues a workforce home loan to an eligible applicant whose
237	237	household income is at least 80 percent of the area median income, the repayment
238	238	of principal on the loan shall be deferred for the 5 consecutive years beginning after
239	239	the date on which the loan is issued, immediately after which the loan recipient shall
240	240	begin the repayment of principal on the loan in monthly installments, or until any
241	241	of the following occurs, at which time the total amount of unpaid principal on the loan
242	242	shall become due and payable:
243	243	1. The recipient of the workforce home loan sells the home.
244	244	2. The recipient of the workforce home loan loses equity in the home as a result
245	245	of refinancing.
246	246	3. The home ceases to be the primary residence of the recipient.
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