00 SENATE CS FOR CS FOR HOUSE BILL NO. 192(STA) 01 "An Act relating to housing assistance provided by the Alaska Housing Finance 02 Corporation and to its rural housing programs, to the corporation's supplemental 03 housing development grants to regional housing authorities, and to housing 04 programs of regional housing authorities; permitting regional housing authorities 05 to make, originate, and service loans for the purchase and development of 06 residential housing; and amending the definitions of `rural' and `small 07 community' as applied in various housing programs." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 18.55 is amended by adding a new section to read: 10 ARTICLE 3A. GENERAL PROVISIONS. 11 Sec. 18.55.965. LIMITATION ON EXERCISE OF POWER. The Alaska 12 Housing Finance Corporation may not make, participate in the making of, purchase, 13 or participate in the purchase of a grant, loan, or investment, or exercise any other 14 power with respect to housing under AS 18.55.010 - 18.55.960, in violation of 01 AS 18.56.096(a)(5) or AS 18.80.240, or if the effect or result of the exercise of the 02 power would constitute a violation of AS 18.56.096(a)(5) or AS 18.80.240. 03 * Sec. 2. AS 18.55.997 is amended to read: 04 Sec. 18.55.997. RESIDENTIAL LOANS. (a) A [IN ADDITION TO THE 05 POWERS AUTHORIZED TO A REGIONAL HOUSING AUTHORITY UNDER 06 AS 18.55.996, A] regional housing authority, in addition to the powers authorized 07 to it under AS 18.55.996, 08 (1) may, in accordance with procedures and policies adopted and 09 approved by the Alaska Housing Finance Corporation, 10 (A) in a small community, make, originate, and service loans 11 for the purchase or development of residential housing; and 12 (B) in an area of the state not in a small community, make, 13 originate, and service loans for the purchase or development of residential 14 housing; however, a loan made or originated and serviced under this 15 subparagraph may be made only from the proceeds of a loan made by the 16 Alaska Housing Finance Corporation to the regional housing authority 17 under regulations adopted by the corporation to meet the housing needs 18 of borrowers who cannot obtain financing through the corporation's 19 programs that are available to address the housing needs of borrowers; 20 (2) shall secure loans made under (1) of this subsection [IN RURAL 21 AREAS OF THE STATE, OTHER THAN IN AN AREA WHERE THE 22 CORPORATION HAS A LOAN OFFICE. A LOAN SHALL BE SECURED] by 23 collateral in an amount acceptable to the corporation; the [. THE] rate of interest on 24 a loan authorized by this subsection [SECTION] may not exceed the interest rate 25 established by the Alaska Housing Finance Corporation for the corporation's 26 corresponding loan program [ON A LOAN ORIGINATED OR PURCHASED 27 UNDER AS 18.56.400 - 18.56.600]. 28 (b) In this section, 29 (1) "development" means the construction of a new residence or the 30 repair, remodeling, rehabilitation, or expansion of an existing home; 31 (2) ["RURAL" HAS THE MEANING GIVEN THE TERM] "small 01 community" has the meaning given in AS 18.56.600. 02 * Sec. 3. AS 18.55.998(a) is amended to read: 03 (a) There is created in the Alaska Housing Finance Corporation a supplemental 04 housing development grant fund. Using corporate earnings or other available funds, the 05 corporation shall make grants to regional housing authorities established under 06 AS 18.55.996 for 07 (1) the cost of [ON-SITE] sewer and water facilities, whether on-site 08 or off-site; 09 (2) road construction to project sites; 10 (3) [,] energy efficient design features in homes; [,] and 11 (4) extension of electrical distribution facilities to individual residences. 12 * Sec. 4. AS 18.55.998(c) is amended to read: 13 (c) A grant made by the corporation to a regional housing authority under 14 this section 15 (1) [GRANT MONEY] may be used by the regional housing 16 authority only for the purpose and the permissible use for which the grant was 17 made; 18 (2) may not [PURPOSES SPECIFIED IN (a) OF THIS SECTION. 19 NO PART OF THE GRANT MONEY MAY] be used for administrative or other costs 20 of a regional housing authority, whether the costs are directly associated with the 21 construction or general costs of the authority. 22 * Sec. 5. AS 18.55.998(d) is amended to read: 23 (d) The Alaska Housing Finance Corporation shall 24 (1) adopt regulations to carry out the purposes of this section; the [. 25 THE] provisions of AS 18.56.088(a) and (b) apply to regulations adopted under this 26 section; and 27 (2) establish a priority system for the allocation of money for grants 28 to pay for off-site sewer and water facility improvements authorized by 29 AS 18.55.998(a)(1). 30 * Sec. 6. AS 18.55.998 is amended by adding a new subsection to read: 31 (f) The Alaska Housing Finance Corporation may not make a grant or 01 participate in the making of a grant for residential housing from the supplemental 02 housing development grant fund if the grant money would support residential housing 03 used or occupied, or offered for use or occupancy, in violation of AS 18.56.096(a)(5) 04 or AS 18.80.240. 05 * Sec. 7. AS 18.56.096 is amended by adding a new subsection to read: 06 (d) The prohibitions of (c) of this section do not apply to a loan made under 07 AS 18.56.420(a)(2)(C) to renovate or improve small community housing if the amount 08 of the loan does not exceed $20,000. 09 * Sec. 8. AS 18.56.300(d) is amended to read: 10 (d) This section does not apply 11 (1) to a nonconforming housing loan made or purchased by the 12 corporation; or 13 (2) to a loan made under AS 18.56.420(a)(2)(B) or (C) to renovate 14 or improve small community housing if the amount of the loan does not exceed 15 $20,000. 16 * Sec. 9. AS 18.56.420(a) is amended to read: 17 (a) There is created in the corporation, as a revolving loan fund, the housing 18 assistance loan fund consisting of money appropriated to it by the legislature and 19 deposited in it by the corporation, and repayments of principal and interest on loans 20 made or purchased from the assets of the fund. The corporation shall 21 (1) adopt regulations to administer the housing assistance loan fund 22 under AS 18.56.400 - 18.56.600; and 23 (2) subject to appropriation, provide money for a rural assistance loan 24 program to originate, purchase, [OR] participate in the purchase of, or refinance 25 (A) small community housing mortgage loans; 26 (B) loans made 27 (i) for building materials for small community housing; 28 or 29 (ii) to pay for the labor of third-party contractors for 30 the installation of building materials in small community housing 31 units; 01 (C) loans made for renovations or improvements to small 02 community housing; 03 (D) loans made for the construction of owner-occupied small 04 community housing other than loans to builders or contractors or loans that 05 compensate an owner for the owner's labor or services in constructing the 06 owner's own housing. 07 * Sec. 10. AS 18.56.440 is amended to read: 08 Sec. 18.56.440. LIMITATIONS ON USE OF HOUSING ASSISTANCE 09 LOAN FUND. The corporation may not use the money in the housing assistance loan 10 fund to 11 (1) originate a direct loan or purchase or participate in the purchase of 12 a small community housing mortgage loan that exceeds the limitations on mortgage 13 loans purchased by the Federal National Mortgage Association as to principal amount 14 or loan-to-value ratio; 15 (2) originate a direct loan or purchase or participate in the purchase of 16 a loan made for building materials for small community housing 17 (A) that exceeds $45,000 or exceeds 18 (i) 80 percent of the appraised value of the work 19 completed on the small community housing for which the loan is made 20 if the small community housing is pledged as collateral for the loan; or 21 (ii) 90 percent of the value of other property that is 22 pledged as security for the loan and that is satisfactory to the 23 corporation as collateral; 24 (B) unless the terms of the loan agreement require inspections 25 and certifications, as required by regulations of the corporation, at the expense 26 of the borrower; and 27 (C) unless the period of time allowed for repayment of the loan 28 is equal to or less than 15 years; 29 (3) originate direct loans or purchase or participate in the purchase of 30 a small community housing mortgage loan that is secured by real property the 31 marketable title to which is shown under AS 18.56.480(b)(2) if the total amount of 01 outstanding small community housing mortgage loans held by the corporation exceeds 02 10 times the amount of money in the restricted title loss reserve account established 03 by AS 18.56.490; 04 (4) originate a direct loan for small community housing or purchase or 05 participate in the purchase of a small community housing mortgage loan, other than 06 a loan for the repair, remodeling, rehabilitation, or expansion of an existing 07 owner-occupied residence, if the borrower has an outstanding housing loan made under 08 a state loan program, other than a loan for [NONOWNER-OCCUPIED] housing under 09 AS 18.56.580 or for nonowner occupied housing under former AS 44.47.520, that 10 bears interest at a rate that was less than the prevailing market interest rate for similar 11 housing loans at the time the loan was made; 12 (5) originate a direct mortgage loan or purchase or participate in the 13 purchase of a mortgage loan for rental housing unless the borrower agrees not to 14 discriminate against tenants or prospective tenants because of sex, marital status, 15 changes in marital status, pregnancy, parenthood, race, religion, color, national origin, 16 or status as a student; 17 (6) originate, purchase, or participate in a loan to a person who has a 18 past due child support obligation established by court order or by the child support 19 enforcement division under AS 25.27.160 - 25.27.220 at the time of application. 20 * Sec. 11. AS 18.56.460 is amended by adding a new subsection to read: 21 (c) For a loan originated or purchased in whole or in part from the housing 22 assistance loan fund under AS 18.56.420, the corporation may make an unsecured loan. 23 The authority of the corporation to make an unsecured loan under this subsection is 24 limited to a loan made 25 (1) under AS 18.56.420(a)(2)(B) or (C) to renovate or improve small 26 community housing that does not exceed $20,000; and 27 (2) for real property if the housing unit for which the unsecured loan 28 is sought 29 (A) is occupied by the borrower under an occupancy certificate 30 or similar instrument granting the borrower an exclusive right of possession of 31 a specific dwelling unit in a cooperative housing development, mutual aid 01 housing program, or similar program; or 02 (B) is located on land the title to which is held by the borrower 03 under a restricted deed issued by the Secretary of the Interior or the secretary's 04 designee, either as a Native restricted deed or as a restricted deed for property 05 in a trustee townsite. 06 * Sec. 12. AS 18.56.580(a) is amended to read: 07 (a) In addition to the powers authorized by AS 18.56.400, the corporation may 08 adopt regulations under AS 18.56.088 allowing the use of money in the housing 09 assistance loan fund to make loans for the purchase or development of rental 10 [NONOWNER OCCUPIED] housing in small communities. 11 * Sec. 13. AS 18.56.580(c) is amended to read: 12 (c) The principal amount of loans made for rental [NONOWNER 13 OCCUPIED] housing under this section may not exceed 20 percent of the total 14 principal amount of loans made for small community housing under AS 18.56.400 - 15 18.56.600. 16 * Sec. 14. AS 18.56.580(d) is amended to read: 17 (d) In this section, 18 (1) "development" means the construction of a new residence or the 19 repair, remodeling, rehabilitation, or expansion of an existing residence; 20 (2) "rental ["NONOWNER OCCUPIED] housing" means a 21 single-family residence that is not occupied by the owner or a multi-family residence 22 having up to 16 [EIGHT] dwelling units, one of which may be [AND THAT IS NOT] 23 occupied by the owner; the corporation may modify this definition if it determines that 24 there is a special need for rental [NONOWNER OCCUPIED] housing in small 25 communities and that a change in the definition is necessary to enable the corporation 26 to meet that need. 27 * Sec. 15. AS 18.56.600 is amended to read: 28 Sec. 18.56.600. DEFINITIONS. In AS 18.56.400 - 18.56.600, 29 (1) "housing" 30 (A) means owner-occupied housing having four or fewer 31 dwelling units [, SINGLE-FAMILY HOUSING AND OWNER-OCCUPIED 01 DUPLEXES] in which not more than 25 percent of the gross floor area is or 02 will be devoted to commercial use; 03 (B) does not include a multi-family residence that constitutes 04 housing for which a loan is made under the rental housing loan program 05 of AS 18.56.580 when one of the dwelling units in the multi-family 06 residence is occupied by the residence owner; 07 (2) "small community" means a community with a population of 6,500 08 [5,500] or less that is not connected by road or rail to Anchorage or Fairbanks, or with 09 a population of 1,600 [1,400] or less that is connected by road or rail to Anchorage or 10 Fairbanks; in this paragraph, "connected by road" does not include a connection by the 11 Alaska marine highway system. 12 * Sec. 16. AS 18.56.799(2) is amended to read: 13 (2) "senior housing" 14 (A) means construction or improvement undertaken primarily 15 to provide dwelling accommodations for persons 55 [60] years of age or older, 16 including conventional housing, housing for frail elderly, group homes, 17 congregate housing, residential horizontal property regimes organized under 18 AS 34.07, residential cooperatives organized under AS 10.15 or AS 34.08, 19 residential condominiums organized under AS 34.08, and other housing that 20 meets special needs of the elderly; 21 (B) includes acquisition, construction, or rehabilitation of land, 22 buildings, improvements, and other nonhousing facilities that are incidental or 23 appurtenant to the housing described in (A) of this paragraph. 24 * Sec. 17. AS 18.56.800 is amended to read: 25 Sec. 18.56.800. DECLARATION OF PURPOSE. There exists in the state a 26 serious shortage of decent, safe, and sanitary residential housing available at low or 27 moderate prices or rentals to persons 55 [60] years of age or older. There also exists 28 in the state organizations whose purposes are to provide the kinds of housing needed 29 to alleviate this shortage. Development work to provide such housing involves 30 substantial expense that is often beyond the resources of the organizations.