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SENATE BILL 2341
By Oliver
HOUSE BILL 2236
By Dixie
HB2236
010622
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AN ACT to amend Tennessee Code Annotated, Title 5;
Title 6; Title 7 and Title 13, Chapter 23, relative to
housing development agency programs.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 13, Chapter 23, is amended by adding
the following as a new part:
13-23-601. This part is known and may be cited as the "First-Time Homebuyer
Assistance Program."
13-23-602. As used in this part:
(1) "Agency" means the housing development agency;
(2) "First-time homebuyer":
(A) Means an individual who satisfies:
(i) The three-year requirement described in Section 143(d) of the
Internal Revenue Code of 1986 (26 U.S.C. § 143(d)), as amended, and
any corresponding federal regulations; and
(ii) Requirements made by the agency by rule, as described in §
13-23-603; and
(B) Includes a single parent who would meet the three-year requirement
described in subdivision (2)(A)(i) but for a present ownership interest in a
principal residence in which the single parent:
(i) Had a present ownership interest with the single parent's
former spouse during the three-year period;
(ii) Resided while married during the three-year period; and
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(iii) No longer has a present ownership interest or resides in such
residence;
(3) "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 less an amount up to one percent (1%) of the
sales price used for seller-paid closing costs; 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;
(4) "Program" means the first-time homebuyer assistance program created in §
13-23-603;
(5) "Program funds" means money appropriated for the program;
(6) "Qualifying mortgage loan" means a mortgage loan that is:
(A) Purchased by the agency; and
(B) Subject to a document that is recorded in the office of the county
register of deeds of the county in which the residential unit is located;
(7) "Qualifying residential unit" means a residential unit that is:
(A) Located in the state;
(B) New construction or newly constructed but not yet inhabited;
(C) Financed by a qualifying mortgage loan;
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(D) Owner-occupied within sixty (60) days of purchase, or in the case of
a two-unit dwelling, at least one (1) unit is owner-occupied within sixty (60) days
of purchase; and
(E) Purchased for an amount that does not exceed:
(i) Four hundred fifty thousand dollars ($450,000); or
(ii) If applicable, the maximum purchase price established by the
agency under § 13-23-603;
(8) "Recipient" means a first-time homebuyer who receives program funds; and
(9) "Residential unit":
(A) Means a house, condominium, townhouse, or similar residential
structure that serves as a one-unit dwelling or forms part of a two-unit dwelling;
and
(B) Includes a manufactured home or modular home that is attached to a
permanent foundation.
13-23-603.
(a) There is created the first-time homebuyer assistance program to be
administered by the agency.
(b) Subject to appropriations by the general assembly and gifts, grants, and
other donations received by the agency for the program, the agency shall distribute
program funds to first-time homebuyers to provide support for the purchase of qualifying
residential units.
(c) The maximum amount of program funds that a first-time homebuyer may
receive under the program is twenty thousand dollars ($20,000).
(d)
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(1) A recipient may use program funds to pay for one (1) or more of the
following:
(A) The down payment on a qualifying residential unit;
(B) Closing costs associated with the purchase of a qualifying
residential unit; or
(C) A permanent reduction in the advertised par interest rate on a
qualifying mortgage loan that is used to finance a qualifying residential
unit.
(2) The agency shall direct the disbursement of program funds for a
purpose authorized in subdivision (d)(1).
(3) A recipient shall not receive a payout or distribution of program funds
upon closing.
(e) The builder or developer of a qualifying residential unit shall not increase the
price of the qualifying residential unit on the basis of program funds being used toward
the purchase of that qualifying residential unit.
(f)
(1) In accordance with rules promulgated by the agency under
subsection (i), the agency 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.
(2) In connection with an adjustment made under subdivision (f)(1), the
agency may establish one (1) or more maximum purchase prices corresponding
by residential unit type, geographic location, or any other factor the agency
considers relevant.
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(3) The agency shall not adjust a maximum purchase price under this
subsection (f) more frequently than once per calendar year.
(g)
(1) Except as provided in subdivision (g)(2), 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, then the recipient shall repay to
the agency an amount equal to the lesser of:
(A) The amount of program funds the recipient received; or
(B) Fifty percent (50%) of the recipient's home equity amount.
(2) Subdivision (g)(1) does not apply to a qualifying mortgage loan that is
refinanced with a new qualifying mortgage loan if any subordinate qualifying
mortgage loan, or loan from program funds used on the purchase of the
qualifying residential unit, is resubordinated only to the new qualifying mortgage
loan.
(h) Any funds repaid to the agency under subsection (g) must be used for
program distributions.
(i) The agency shall promulgate rules in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, governing the application
form, process, and criteria the agency will use to distribute program funds to first-time
homebuyers.
(j) The agency may use up to five percent (5%) of program funds for
administration.
(k) The agency shall report annually to the finance, ways and means committee
of the senate and the committee in the house of representatives having jurisdiction over
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budget-related matters on disbursements from the program and any adjustments made
to the maximum purchase price or maximum purchase prices of a qualifying residential
unit under subsection (f).
SECTION 2. For purposes of promulgating rules and forms, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect
January 1, 2027, the public welfare requiring it.