Revision: Feb. 4, 2025, 10:35 a.m.
SB 86-FN - AS INTRODUCED
2025 SESSION
25-1030
07/05
SENATE BILL 86-FN
AN ACT relative to the housing finance authority's affordable housing guarantee program.
SPONSORS: Sen. Perkins Kwoka, Dist 21; Sen. Altschiller, Dist 24; Sen. Prentiss, Dist 5; Sen. Lang, Dist 2; Sen. Innis, Dist 7; Sen. Murphy, Dist 16; Sen. Rosenwald, Dist 13; Sen. Fenton, Dist 10; Sen. Reardon, Dist 15; Sen. Long, Dist 20; Sen. Watters, Dist 4; Rep. D. Paige, Carr. 1; Rep. Simpson, Rock. 33; Rep. Stavis, Graf. 13
COMMITTEE: Commerce
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ANALYSIS
This bill established a affordable housing guarantee program within the housing finance authority to promote affordable housing for low- and moderate-income persons.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
25-1030
07/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Five
AN ACT relative to the housing finance authority's affordable housing guarantee program.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subdivision; Affordable Housing Guaranteed Loan Program. Amend RSA 204-C by inserting after section 92 the following new subdivision:
Affordable Housing Guaranteed Loan Program
204-C:93 Definitions. In this subdivision:
I. "Affordable housing" means:
(a) Housing whose combined rental and utility costs, or combined mortgage loan debt services, property taxes, and required insurance, do not exceed 30 percent of the gross income of persons of low or moderate income.
(b) Manufactured housing parks, as defined in RSA 205-A:1, provided that the park meets the following conditions:
(1) The majority of residents, as evidenced by a survey conducted within 3 years of loan origination, attest to being of low or moderate income; and
(2) Lot rents and fees are determined to be affordable to residents of low and moderate income according to criteria established by the authority.
(c) Homes for persons with disabilities, mobile homes, prefabricated homes, or any buildings, land, improvements, equipment, facilities, or other real or personal property deemed by the authority to be necessary, convenient, ancillary, or desirable.
II. "Authority" means the housing finance authority established under RSA 204-C:2.
III. "Person of low income" means any individual or family whose gross income is greater than 50 percent, but less than or equal to 60 percent, of the state median income, which may be adjusted based on the number of persons living in a given household.
IV. "Person of moderate income" means any individual or family whose gross income is greater than 60 percent, but less than or equal to 80 percent, of the state median income, which may be adjusted based on the number of persons living in a given household.
V. "Person of very low income" means any individual or family whose gross income is less than or equal to 50 percent of the state median income, which may be adjusted based on the number of persons living in a given household.
204-C:94 Rulemaking. The authority shall adopt rules, pursuant to its own procedures, relative to:
I. The conduct of its business;
II. The selection and maintenance of eligible lenders;
III. The schedule of fees and guarantee premiums to be charged for the issuance of certificates of guarantee or other services;
IV. The types of activities eligible for financing with loans guaranteed pursuant to this subdivision; and
V. Any matter necessary to carry out the powers and duties of the authority under this subdivision.
204-C:95 Administration; Eligibility; Demonstration.
I. The authority shall make a good faith effort to approve applications from nonprofit and for-profit lending organizations which provide, or are planning to provide, loans for the creation or preservation of affordable housing, consistent with the criteria established in this subdivision and rules adopted by the authority. When entering into contracts for guaranteed loans pursuant to this subdivision, the authority shall require that applicants demonstrate that they satisfy the requirements of this section.
II. Each applicant shall:
(a) Register with the secretary of state as a private, nonprofit or for-profit entity, or be a municipal housing authority.
(b) Demonstrate a need for a proposed loan addresses to develop or preserve affordable housing.
(c) Demonstrate that the borrower has agreed to provide affordable housing to persons of very low, low, or moderate income, as defined in this subdivision.
(d) Demonstrate that the borrower is fiscally sound, as shown in a financial statement.
(e) Possess all necessary licenses and approvals to offer commercial loans in this state.
(f) Establish procedures to monitor borrowers to ensure ongoing compliance with this subdivision and rules of the authority for the term of the guaranteed loan.
III. Loan guarantee recipients shall demonstrate to the authority the disposition of any money provided under the affordable housing guaranteed loan program, as defined by rules established by the authority.
204-C:96 Guarantee. Upon application from a lender, in such form as the authority may require, the authority may issue, or commit itself to issue to the lender or its assigns, a certificate of guarantee equal to 80 percent of the principal due on the loan. In no instance shall any loan principal guaranteed under this section exceed $30,000,000 per lender per fiscal year. The aggregate amount of loans guaranteed under this section shall not exceed $100,000,000 in any fiscal year.
204-C:97 Guarantee Certificate Conclusive.
A certificate of guarantee issued by the authority, in the hands of the original lender to whom the certificate was issued, shall be conclusive evidence of its validity for the purposes of this subdivision, except in instances of fraud.
204-C:98 Guarantee; Credit of State Pledged. The full faith and credit of this state is pledged to support and redeem certificates of guarantee issued by the authority. In furtherance of that pledge, the state treasurer shall advance to the authority, from available moneys in the treasury, such amounts as may be requested from time to time by the authority to enable it to perform all guaranteed obligations punctually and in accordance with their terms. The authority shall request such advances from time to time as required for such purpose.
2 Effective Date. This act shall take effect 60 days after its passage.
25-1030
Revised 2/3/25
SB 86-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to the housing finance authority's affordable housing guarantee program.
FISCAL IMPACT: This bill does not provide funding, nor does it authorize new positions.
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Estimated State Impact | ||||||
| FY 2025 | FY 2026 | FY 2027 | FY 2028 | ||
Revenue | $0 | $0 | $0 | $0 | ||
Revenue Fund(s) | None | |||||
Expenditures* | $0 | Indeterminable Increase | ||||
Funding Source(s) | General Fund | |||||
Appropriations* | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None | |||||
*Expenditure = Cost of bill *Appropriation = Authorized funding to cover cost of bill | ||||||
METHODOLOGY:
This bill creates a loan guarantee program for multifamily housing developments financed by commercial lenders which aims to provide the New Hampshire Housing Finance Authority with the capacity to issue loans, supported by a State guarantee, for the development of new family housing projects.
The New Hampshire Finance Housing Authority (NHHFA) states that this bill guarantees lenders compensation of 80% of the outstanding value of any loans that a borrower defaults on, paid by the State. Since the NHHFA would administer this bill, they anticipate charging a modest monthly fee to lenders participating in the program to offset staffing and administrative costs, which are projected to be $20,000 in FY 2026 and $15,000 per year thereafter. Initially, these costs would be covered by the state through General Funds. As loans are issued, the NHHFA foresees the possibility the monthly guarantee fee could partially or entirely offset program costs. Additional costs to the State would depend on the amount of defaulted loans, which remains indeterminable.
The Treasury Department indicates there would be no immediate fiscal impact on the State unless a loan default occurs, at which point the State would be obligated to cover the guaranteed loans. Given the uncertainty of the number of potential defaults, the cost to the State remains indeterminable. However, the State's maximum liability would be capped at $100,000,000 per fiscal year. Additionally, no fiscal impact is anticipated at the county and local levels.
AGENCIES CONTACTED:
New Hampshire Housing Finance Authority and Treasury Department