Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB576 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 SENATE BILL 576
5	5	October 30, 2023 - Introduced by Senators L. JOHNSON, HESSELBEIN, ROYS, LARSON,
6	6	WIRCH and AGARD, cosponsored by Representatives GOYKE, MOORE OMOKUNDE,
7	7	BALDEH, OHNSTAD, CABRERA, HONG, JOERS, STUBBS, SUBECK, BILLINGS,
8	8	SHANKLAND, BARE, PALMERI, SINICKI, C. ANDERSON, CLANCY and JACOBSON.
9	9	Referred to Committee on Housing, Rural Issues and Forestry.
10	10	AN ACT to create 20.490 (3) (fq), 20.490 (3) (gq) and 234.665 of the statutes;
11	11	relating to: a revolving workforce home loan program and making an
12	12	appropriation.
13	13	Analysis by the Legislative Reference Bureau
14	14	This bill establishes a revolving loan program administered by the Wisconsin
15	15	Housing and Economic Development Authority for the purpose of issuing loans,
16	16	which the bill terms “workforce home loans,” to eligible applicants to provide gap
17	17	financing to supplement a conventional mortgage for the purchase of a single-family
18	18	home in Wisconsin that is or will be the eligible applicant's primary residence. The
19	19	bill appropriates $100,000,000 for the program and requires WHEDA to use
20	20	repayments of loans to fund additional loans under the program. The bill authorizes
21	21	WHEDA to establish an interest rate for any workforce home loan that is below the
22	22	market interest rate or to charge no interest.
23	23	Under the bill, a local housing authority or community-based organization or
24	24	other qualified local organization, as determined by WHEDA, certifies a loan
25	25	applicant to WHEDA, subject to WHEDA's approval. An applicant is eligible for a
26	26	workforce home loan under the bill if all of the following are satisfied:
27	27	1. The applicant is an individual applying for the loan as a head of household,
28	28	as determined by WHEDA.
29	29	2. The applicant has not had any ownership interest in residential real
30	30	property for the three consecutive years immediately preceding the date of the
31	31	application.
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37	37	3. The applicant's household annual income is less than 120 percent of the area
38	38	median income for the county in which the home is located.
39	39	4. The applicant's housing costs, excluding utility-related costs, in the home
40	40	for which the applicant is applying for a workforce home loan, as determined by the
41	41	qualified organization, will not exceed 30 percent of the applicant's household
42	42	income.
43	43	5. The total amount of the mortgage for which the applicant is applying for a
44	44	workforce home loan does not exceed the conforming loan limit for the county in
45	45	which the home is located, as established by the federal housing finance agency.
46	46	6. The applicant has a satisfactory credit record, history, or rating, as
47	47	determined by the qualified organization in consultation with WHEDA.
48	48	The bill provides that WHEDA may not issue a workforce home loan that
49	49	exceeds $100,000, adjusted for inflation annually beginning on the effective date of
50	50	the bill. The bill requires that the amount of each workforce home loan be based on
51	51	the applicant's household income and size in combination with the amount of funding
52	52	available for the loan.
53	53	The bill establish different repayment rules for workforce home loans
54	54	depending on the eligible applicant's household income. Specifically, if the authority
55	55	issues a workforce home loan to an applicant whose household income is less than
56	56	80 percent of the area median income for the county in which the home is located, all
57	57	of the following apply:
58	58	1. The repayment of principal due on the loan must be deferred until the
59	59	recipient of the workforce home loan sells the home or loses equity in the home as a
60	60	result of refinancing or the home ceases to be the primary residence of the recipient.
61	61	2. Beginning with the sixth full year following the issuance date of the
62	62	workforce home loan, each year WHEDA must forgive 10 percent of the total amount
63	63	of unpaid principal on the loan.
64	64	On the other hand, if WHEDA issues a workforce home loan to an applicant
65	65	whose household income is 80 percent or more of the area median income for the
66	66	county in which the home is located, the repayment of principal on the loan must be
67	67	deferred for the five consecutive years beginning after the date on which the loan is
68	68	issued, immediately after which the loan recipient is required to begin the
69	69	repayment of principal on the loan in monthly installments, or until the recipient of
70	70	the workforce home loan sells the home or loses equity in the home as a result of
71	71	refinancing or the home ceases to be the primary residence of the recipient.
72	72	Because this bill may increase or decrease, directly or indirectly, the cost of the
73	73	development, construction, financing, purchasing, sale, ownership, or availability of
74	74	housing in this state, the Department of Administration, as required by law, will
75	75	prepare a report to be printed as an appendix to this bill.
76	76	For further information see the state and local fiscal estimate, which will be
77	77	printed as an appendix to this bill.
78	78	The people of the state of Wisconsin, represented in senate and assembly, do
79	79	enact as follows: - 3 -2023 - 2024 Legislature
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82	82	SECTION 1
83	83	SENATE BILL 576
84	84	SECTION 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
85	85	the following amounts for the purposes indicated:
86	86	2023-24 2024-25
87	87	20.490 Wisconsin Housing and Economic
88	88	Development Authority
89	89	(3) HOMEOWNERSHIP MORTGAGE ASSISTANCE
90	90	(fq) Workforce home loan program GPR C 100,000,000 -0-
91	91	SECTION 2. 20.490 (3) (fq) of the statutes is created to read:
92	92	20.490 (3) (fq) Workforce home loan program. As a continuing appropriation,
93	93	the amounts in the schedule for workforce home loans under s. 234.665.
94	94	SECTION 3. 20.490 (3) (gq) of the statutes is created to read:
95	95	20.490 (3) (gq) Workforce home loan repayments. All moneys received from the
96	96	repayment of workforce home loans made under s. 234.665, to be used for workforce
97	97	home loans under s. 234.665.
98	98	SECTION 4. 234.665 of the statutes is created to read:
99	99	234.665 Workforce home loan program. (1) DEFINITIONS. In this section:
100	100	(a) “Area median income” means the area median family income in the county
101	101	in which the housing is located, adjusted for family size, as published annually by
102	102	the federal department of housing and urban development.
103	103	(b) “Qualified organization” means a housing authority, as defined in s. 16.301
104	104	(2) (a), a community based organization, as defined in s 16.301 (1), or another
105	105	qualified local organization, as determined by the authority.
106	106	(c) “Workforce home loan” means a loan issued by the authority under sub. (3)
107	107	(a).
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132	132	SECTION 4 SENATE BILL 576
133	133	(2) CERTIFICATIONS. (a) A qualified organization may certify an eligible
134	134	applicant to receive a workforce home loan in an amount determined by the qualified
135	135	organization, subject to the approval of the authority.
136	136	(b) An applicant for a workforce home loan is eligible if the applicant satisfies
137	137	all of the following:
138	138	1. The applicant is an individual applying for the loan as a head of household,
139	139	as determined by the authority.
140	140	2. The applicant has not had any ownership interest in residential real
141	141	property for the 3 consecutive years immediately preceding the date of the
142	142	application.
143	143	3. The applicant's household annual income is less than 120 percent of the area
144	144	median income.
145	145	4. The applicant's housing costs, excluding utility-related costs, in the home
146	146	for which the applicant is applying for a workforce home loan, as determined by the
147	147	qualified organization, will not exceed 30 percent of the applicant's household
148	148	income.
149	149	5. The total amount of the mortgage for which the applicant is applying for a
150	150	workforce home loan does not exceed the conforming loan limit for the county in
151	151	which the home is located, as established by the federal housing finance agency.
152	152	6. The applicant has a satisfactory credit record, history, or rating, as
153	153	determined by the qualified organization in consultation with the authority.
154	154	(3) LOAN ISSUANCE. (a) Subject to pars. (b) to (e), from the appropriations under
155	155	s. 20.490 (3) (fq) and (gq), the authority may issue a loan to an eligible applicant
156	156	certified by a qualified organization under sub. (2). The authority may establish an
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183	183	SECTION 4
184	184	SENATE BILL 576
185	185	interest rate for any workforce home loan that is below the market interest rate or
186	186	may charge no interest.
187	187	(b) The authority may issue a workforce home loan only for the purpose of
188	188	providing gap financing to supplement a conventional mortgage for the purchase of
189	189	a single-family home in this state, whether new construction or an existing home,
190	190	that is or will be the eligible applicant's primary residence.
191	191	(c) The authority may not issue a workforce home loan that exceeds $100,000,
192	192	adjusted for inflation annually beginning on the effective date of this paragraph ....
193	193	[LRB inserts date]. The amount of each workforce home loan shall be based on the
194	194	eligible applicant's household income and size in combination with the amount of
195	195	funding available for the loan.
196	196	(d) If the authority issues a workforce home loan to an eligible applicant whose
197	197	household income is less than 80 percent of the area median income, all of the
198	198	following apply:
199	199	1. The repayment of principal on the loan shall be deferred until any of the
200	200	following occurs, at which time the total amount of unpaid principal on the loan,
201	201	minus the principal forgiven under subd. 2., shall become due and payable:
202	202	a. The recipient of the workforce home loan sells the home.
203	203	b. The recipient of the workforce home loan loses equity in the home as a result
204	204	of refinancing.
205	205	c. The home ceases to be the primary residence of the recipient.
206	206	2. Beginning with the 6th full year following the issuance date of the workforce
207	207	home loan, each year the authority shall forgive 10 percent of the total amount of
208	208	unpaid principal on the loan.
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234	234	SECTION 4 SENATE BILL 576
235	235	(e) If the authority issues a workforce home loan to an eligible applicant whose
236	236	household income is at least 80 percent of the area median income, the repayment
237	237	of principal on the loan shall be deferred for the 5 consecutive years beginning after
238	238	the date on which the loan is issued, immediately after which the loan recipient shall
239	239	begin the repayment of principal on the loan in monthly installments, or until any
240	240	of the following occurs, at which time the total amount of unpaid principal on the loan
241	241	shall become due and payable:
242	242	1. The recipient of the workforce home loan sells the home.
243	243	2. The recipient of the workforce home loan loses equity in the home as a result
244	244	of refinancing.
245	245	3. The home ceases to be the primary residence of the recipient.
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