Enact the Housing Recovery Act

hb857_00_IN

As Introduced

136th
General Assembly

Regular
Session
H. B. No. 857

2025-2026

Representatives Brownlee, Sigrist

Cosponsors: Representatives Brennan,
Lett, McNally, Piccolantonio, Rader, Synenberg, Upchurch

To
amend section 122.98 and to enact sections 122.982 and 122.983 of the
Revised Code
to
modify the Residential Development Revolving Loan Program and to name
this act the Housing Recovery Act.

BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section
1.
That
section 122.98 be amended and sections 122.982 and 122.983 of the
Revised Code be enacted to read as follows:

Sec.
122.98.
(A)
The general assembly finds that access to affordable housing
in
rural areas
is
an important part of fostering a robust and lasting population.
Accordingly, it is declared to be the public policy of the state to
increase the availability of
single-family
homes in the rural areas
residential
housing in this state
through
the residential development revolving loan program, administered by
the department of development.

(B)
An eligible borrower for a residential development loan is a county,

or
a
township
,

or municipal corporation
that
is fully or partially located in a county, that meets both of the
following:

(1)
Has a population of not more than seventy-five thousand according to
the most recent federal decennial census published by the United
States census bureau;

(2)
The

number
of privately owned housing units authorized by building permit in the
preceding calendar year, according to the most recent data provided
by the United States census bureau, is less than the average number
of private housing units authorized by building permit for counties

located

in
this state
over
the same period
.

(C)
(C)(1)(a)

An eligible borrower shall use the proceeds of a residential
development loan
exclusively
to
for
either of the following purposes:

(i)
To
develop,
repair, or upgrade water, sewer, transportation, electric, or gas
infrastructure needed for the construction of
single-family,

residential
dwellings that are part of a residential development project
;

(ii)
To offset, defray, or otherwise make more affordable costs related to
the construction of residential dwellings
.

(b)
As used in this section, "construction of residential dwellings"
includes the conversion of commercial structures to residential
dwellings.

(2)

An
eligible borrower shall not use any portion of the proceeds for
routine infrastructure maintenance or for developments, repairs, or
upgrades that exceed the projected requirements of the residential
development project.

(D)
The department shall not approve an application for a residential
development loan unless the eligible borrower demonstrates, to the
satisfaction of the department, that the residential development
project
served
by the infrastructure developments, repairs, or upgrades
meets

all

both

of
the following:

(1)

Is
fully located in a county that meets the criteria prescribed by
divisions (B)(1) and (2) of this section;

(2)

Has a net density of at least four single-family, residential
dwellings per acre;

(3)
(2)

Is zoned exclusively for
single-family,

residential
use
;

(4)
Does not currently, and will not upon its completion, include a
qualified low-income building that receives a tax credit under 26
U.S.C. 42
.

(E)
An eligible borrower shall, at minimum, include all of the following
in the loan application:

(1)
A description of the
infrastructure
developments, repairs, or upgrades
residential
development project
to
be funded by the loan and an estimate of the total cost
to
complete those developments, repairs, or upgrades
of
the project
;

(2)
The loan amount requested by the eligible borrower, which shall not
exceed
either

any

of
the following amounts:

(a)
Fifty per cent of the total
project

cost

of the infrastructure developments, repairs, or upgrades
;

(b)

Thirty

Fifty

thousand
dollars per single-family, residential dwelling included in the
residential development project

served by the developments, repairs or upgrades
;

(c)
Twenty thousand dollars per unit in a multifamily residential
dwelling included in the residential development project;

(d)
Eight hundred thousand dollars
.

(3)
Documentation sufficient to prove, to the satisfaction of the
department, all of the following:

(a)
That the applicant is an eligible borrower under division (B) of this
section;

(b)
That the
infrastructure
developments, repairs, or upgrades meet
residential
development project meets
the
requirements under division (C) of this section;

(c)
That the residential development project

served by those developments, repairs, or upgrades

meets the requirements under division (D) of this section.

(4)
The proposed or recorded plot of the subdivision that is the basis of
the development project.

(5)
Certification that the eligible borrower agrees to comply with all
provisions of this section.

(F)
The department shall accept applications and make low-interest loans
under this section on a rolling basis whenever funding is available.
The department shall begin accepting applications for the first round
of loans not later than January 1, 2026.

(G)
The department shall not establish or levy any fees on loan
applicants or recipients.

(H)
An eligible borrower that receives a loan under this section shall do
all of the following:

(1)
Exempt the residential development project
served
by the infrastructure developments, repairs, or upgrades,
from
both of the following:

(a)
Any building or road standards of the eligible borrower that are more
stringent than those prescribed by state law;

(b)
Ordinances, resolutions, rules, or restrictions of the eligible
borrower concerning any of the following:

(i)
Minimum square footage for residential dwellings;

(ii)
Off-street parking;

(iii)
The existence, size, or placement of a garage.

(2)
Complete any required traffic reviews or studies for the residential
development project within forty-five days after receiving the loan;

(3)
Provide a quarterly report to the director on the status of the work
funded by the loan;

(4)
Repay the principal and interest of the loan in accordance with terms
specified by the department.

(I)
The director shall develop and utilize scoring metrics in
prioritizing applications, determining whether to approve
low-interest loans, and determining the amount of such loans. The
metrics must meet
all

both

of
the following requirements:

(1)
Give higher priority to projects in locations with greater housing
need and lack of private housing investment;

(2)
Consider the potential economic impact of the project and the
regional distributive balance of the loans
;

(3)
Not consider whether the project is located in an economically
distressed area, including by weighting preference based on the
poverty rate in the jurisdiction or census tract in which the project
is located
.

(J)
The interest rate for loans made under the program shall be the
effective federal funds rate in effect at the time of the loan
agreement. The department shall credit all principal, interest, and
fees paid under this section by an eligible borrower to the
residential development revolving loan fund created under section
122.981 of the Revised Code.

Sec.
122.982.
The
residential development revolving loan program shall use the
following county tiers based on population determined according to
the most recent federal decennial census published by the United
States census bureau to provide residential development loans in
those counties:

(A)
Tier one - less than one hundred thousand people;

(B)
Tier two - from one hundred thousand to five hundred thousand people;

(C)
Tier three - more than five hundred thousand people.

Sec.
122.983.
(A)
Each tier described in section 122.982 of the Revised Code shall
initially be funded equally.

(B)
Proceeds from loans made from each tier shall be credited to that
tier.

(C)
Subject to both of the following, the director of development may
redistribute funds between the tiers of the residential development
revolving loan program as necessary to facilitate demand and usage:

(1)
The director of development may initiate a redistribution at any time
except that, once a redistribution occurs, another redistribution
shall not occur for at least twelve months.

(2)
A redistribution shall not result in any tier of the residential
development revolving loan program having funds equal to more than
twice the amount of any other tier in the program.

(D)
On an ongoing basis, the director shall evaluate the program and how
it is being used to best determine the proper distribution of funds
between the tiers.

Section
2.
That
existing section 122.98 of the Revised Code is hereby repealed.

Section
3.
This
act shall be known as the Housing Recovery Act.