Bill Summary – FastDemocracy

Enrolled Copy                                                                         S.B. 240
                FIRST-TIME HOMEBUYER ASSISTANCE PROGRAM
                                      2023 GENERAL SESSION
                                           STATE OF UTAH
                                Chief Sponsor: J. Stuart Adams
                               House Sponsor: Stephen L. Whyte
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 LONG TITLE
 General Description:
        This bill creates the First-Time Homebuyer Assistance Program.
 Highlighted Provisions:
        This bill:
        < defines terms;
        < creates the First-Time Homebuyer Assistance Program (program) within the Utah
 Housing Corporation;
        < provides for the Utah Housing Corporation to use program funds to assist first-time
 homebuyers in purchasing certain housing;
        < limits the use of program funds for payment of certain costs associated with the
 purchase of housing;
        < provides for a first-time homebuyer's repayment of program funds in certain
 circumstances;
        < requires the Utah Housing Corporation to make rules to administer the program;
        < allows the Utah Housing Corporation to use a certain amount of program funds on
 administration; and
        < requires the Utah Housing Corporation to report annually to the Legislature on
 program disbursements.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        This bill provides a special effective date.
       S.B. 240                                                                          Enrolled Copy
 Utah Code Sections Affected:
 ENACTS:
        63H-8-501, Utah Code Annotated 1953
        63H-8-502, Utah Code Annotated 1953
34
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 63H-8-501 is enacted to read:
                          Part 5. First-Time Homebuyer Assistance Program
        63H-8-501. Definitions.
        As used in this part:
        (1) "First-time homebuyer" means an individual who qualifies for assistance under 42
 U.S.C. Sec. 12852.
        (2) "Home equity amount" means the difference between:
        (a) (i) in the case of a sale, the sales price for which the qualifying residential unit is
 sold by the recipient in a bona fide sale to a third party with no right to repurchase; or
        (ii) in the case of a refinance, the current appraised value of the qualifying residential
 unit; and
        (b) the total payoff amount of any qualifying mortgage loan that was used to finance
 the purchase of the qualifying residential unit.
        (3) "Program" means the First-Time Homebuyer Assistance Program created in Section
 63H-8-502.
        (4) "Program funds" means money appropriated for the program.
        (5) "Qualifying mortgage loan" means a mortgage loan that:
        (a) is purchased by the corporation; and
        (b) is subject to a document that is recorded in the office of the county recorder of the
 county in which the residential unit is located.
        (6) "Qualifying residential unit" means a residential unit that:
        (a) is located in the state;
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       Enrolled Copy                                                                             S.B. 240
         (b) is new construction or newly constructed but not yet inhabited;
         (c) is financed by a qualifying mortgage loan;
         (d) is owner-occupied upon purchase; and
         (e) is purchased for an amount that does not exceed:
         (i) $450,000; or
         (ii) if applicable, the maximum purchase price established by the corporation under
 Subsection 63H-8-502(6).
         (7) "Recipient" means a first-time homebuyer who receives program funds.
         (8) (a) "Residential unit" means a house, condominium, townhome, or similar
 residential structure that serves as a one-unit dwelling.
         (b) "Residential unit" includes a manufactured home or modular home that is attached
 to a permanent foundation.
         Section 2. Section 63H-8-502 is enacted to read:
         63H-8-502. First-Time Homebuyer Assistance Program.
         (1) There is created the First-Time Homebuyer Assistance Program administered by
 the corporation.
         (2) Subject to appropriations from the Legislature, the corporation shall distribute
 program funds to first-time homebuyers to provide support for the purchase of qualifying
 residential units.
         (3) The maximum amount of program funds that a first-time homebuyer may receive
 under the program is $20,000.
         (4) (a) A recipient may use program funds to pay for:
         (i) the down payment on a qualifying residential unit;
         (ii) closing costs associated with the purchase of a qualifying residential unit;
         (iii) a permanent reduction in the advertised par interest rate on a qualifying mortgage
 loan that is used to finance a qualifying residential unit; or
         (iv) any combination of Subsections (4)(a)(i), (ii), and (iii).
         (b) The corporation shall direct the disbursement of program funds for a purpose
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        S.B. 240                                                                          Enrolled Copy
 authorized in Subsection (4)(a).
         (c) A recipient may not receive a payout or distribution of program funds upon closing.
         (5) The builder or developer of a qualifying residential unit may not increase the price
 of the qualifying residential unit on the basis of program funds being used towards the purchase
 of that qualifying residential unit.
         (6) In accordance with rules made by the corporation under Subsection (9), the
 corporation may adjust the maximum purchase price of a qualifying residential unit for which a
 first-time homebuyer qualifies to receive program funds in order to reflect current market
 conditions, provided that the corporation adjusts the maximum purchase price under this
 Subsection (6) no more frequently than once each calendar year.
         (7) If the recipient sells the qualifying residential unit or refinances the qualifying
 mortgage loan that was used to finance the purchase of the qualifying residential unit before the
 end of the original term of the qualifying mortgage loan, the recipient shall repay to the
 corporation an amount equal to the lesser of:
         (a) the amount of program funds the recipient received; or
         (b) 50% of the recipient's home equity amount.
         (8) Any funds repaid to the corporation under Subsection (7) shall be used for program
 distributions.
         (9) The corporation shall make rules governing the application form, process, and
 criteria the corporation will use to distribute program funds to first-time homebuyers.
         (10) The corporation may use up to 5% of program funds for administration.
         (11) The corporation shall report annually to the Social Services Appropriations
 Subcommittee on disbursements from the program and any adjustments made to the maximum
 purchase price of a qualifying residential unit under Subsection (6).
         Section 3. Effective date.
         This bill takes effect on July 1, 2023.
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