SB 576

This bill establishes a revolving loan program administered by the Wisconsin

Housing and Economic Development Authority for the purpose of issuing loans,

which the bill terms “workforce home loans,” to eligible applicants to provide gap

financing to supplement a conventional mortgage for the purchase of a single-family

home in Wisconsin that is or will be the eligible applicant's primary residence. The

bill appropriates $100,000,000 for the program and requires WHEDA to use

repayments of loans to fund additional loans under the program. The bill authorizes

WHEDA to establish an interest rate for any workforce home loan that is below the

market interest rate or to charge no interest.

Under the bill, a local housing authority or community-based organization or

other qualified local organization, as determined by WHEDA, certifies a loan

applicant to WHEDA, subject to WHEDA's approval. An applicant is eligible for a

workforce home loan under the bill if all of the following are satisfied:

1. The applicant is an individual applying for the loan as a head of household,

as determined by WHEDA.

2. The applicant has not had any ownership interest in residential real

property for the three consecutive years immediately preceding the date of the

application.

3. The applicant's household annual income is less than 120 percent of the area

median income for the county in which the home is located.

4. The applicant's housing costs, excluding utility-related costs, in the home

for which the applicant is applying for a workforce home loan, as determined by the

qualified organization, will not exceed 30 percent of the applicant's household

income.

5. The total amount of the mortgage for which the applicant is applying for a

workforce home loan does not exceed the conforming loan limit for the county in

which the home is located, as established by the federal housing finance agency.

6. The applicant has a satisfactory credit record, history, or rating, as

determined by the qualified organization in consultation with WHEDA.

The bill provides that WHEDA may not issue a workforce home loan that

exceeds $100,000, adjusted for inflation annually beginning on the effective date of

the bill. The bill requires that the amount of each workforce home loan be based on

the applicant's household income and size in combination with the amount of funding

available for the loan.

The bill establish different repayment rules for workforce home loans

depending on the eligible applicant's household income. Specifically, if the authority

issues a workforce home loan to an applicant whose household income is less than

80 percent of the area median income for the county in which the home is located, all

of the following apply:

1. The repayment of principal due on the loan must be deferred until the