The bill establishes a "locally controlled housing fund" as a separate account within the housing development fund, aimed at assisting eligible recipients such as cities, counties, and housing cooperatives in acquiring, rehabilitating, or constructing housing. The fund will provide financing options including construction financing, permanent financing, and refinancing to increase the locally controlled housing stock. The bill outlines definitions for key terms, eligibility criteria for recipients, and requirements for the use of funds, ensuring that a significant portion of the housing units financed are affordable for low- and moderate-income households.

Additionally, the bill mandates the creation of an annual report starting January 15, 2026, detailing the projects funded and their purposes. It also appropriates funds from the general fund to support the establishment and administration of the locally controlled housing fund. The agency is required to ensure compliance with accessibility standards and tenant protections, and it must employ a director to oversee the fund's operations and outreach efforts.