HOUSE BILL REPORT

ESB 5647

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Reported by House Committee On:

Community Development, Housing & Tribal Affairs

Title: An act relating to creating a low-income home rehabilitation revolving loan program.

Brief Description: Creating a low-income home rehabilitation revolving loan program.

Sponsors: Senators Honeyford, Takko, Schoesler and Saldaña.

Brief History:

Committee Activity:

Community Development, Housing & Tribal Affairs: 3/15/17, 3/21/17 [DP].

Brief Summary of Engrossed Bill

  • Creates the Low-Income Home Rehabilitation Revolving Loan Program within the Department of Commerce for the rehabilitation of homes owned by low-income homeowners in rural areas.

HOUSE COMMITTEE ON COMMUNITY DEVELOPMENT, HOUSING & TRIBAL AFFAIRS

Majority Report: Do pass. Signed by 7 members: Representatives Ryu, Chair; Macri, Vice Chair; McCabe, Ranking Minority Member; Barkis, Assistant Ranking Minority Member; Jenkin, Reeves and Sawyer.

Staff: Kirsten Lee (786-7133).

Background:

Department of Commerce Housing Assistance Program.

The state Housing Trust Fund (HTF), a common name for the state Housing Assistance Program, was established as a renewable resource to meet the basic housing needs of low-income and special needs citizens. The HTF is managed by the Department of Commerce (Department) to support the Department's housing programs.

Through the HTF, the Department distributes funding through a competitive grant process to eligible organizations for projects that serve individuals and families with special needs and whose income is at or below 50 percent of the median family income for the county or city where the project is located. At least 30 percent of the HTF funding must be used for projects in rural areas. Organizations eligible to receive funding include local governments, local housing authorities, regional support networks, nonprofit community or neighborhood-based organizations, federally recognized Indian tribes, and regional or statewide nonprofit housing assistance organizations.

Funding from the HTF may be used for various related purposes, including:

Federal Department of Health and Human Services.

The Department of Health and Human Services (HHS) provides nationwide health and human services and oversees programs that provide advancement in medicine, public health, and social services. Each year the HHS issues poverty guidelines, also referred to as the federal poverty level. The poverty guidelines are used as eligibility criterion for a number of federal assistance programs. For example, in Washington, the federal poverty level used for a single person is $12,060 and the federal poverty level used for a family of four is $24,600.

United States Department of Housing and Urban Development.

The United States Department of Housing and Urban Development (HUD) provides many affordable housing opportunities to states, local governments, and individual homebuyers. The HUD's Community Development Block Grant Program provides grants to state and local governments to provide assistance to nonentitled areas for housing and community development needs. The HUD defines nonentitlement areas as those that are not metropolitan cities or part of an urban county, cities with a population of less than 50,000, and counties with a population of less than 200,000.

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Summary of Bill:

The Low-Income Home Rehabilitation Revolving Loan Program (LHRRLP) is established within the Department of Commerce (Department).

The program must include that:

The Department must contract with rehabilitation agencies to provide home rehabilitation to participating homeowners. "Rehabilitation agency" means any approved Department grantee, tribal nation, or any public service company, municipality, public utility district, mutual cooperative or other entity that bears the responsibility for rehabilitating residences under the LHRRLP. Rehabilitation agencies may not charge more than the allowed administrative fee to participating homeowners and must report at least quarterly on project costs and the number of homes repaired and rehabilitated under the LHRRLP.

A nonappropriated account is created, the Low-Income Home Rehabilitation Revolving Loan Program Account (Account), in the custody of the State Treasurer. Expenditures from the Account may only be used for the purpose of the LHRRLP and may only be authorized by the Director of the Department or the Director's designee.

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Appropriation: None.

Fiscal Note: Available.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

Staff Summary of Public Testimony:

(In support) The Low-Income Revolving Loan Program (LHRRLP) is designed to allow residents to continue living in their homes by providing funding for those who cannot afford to maintain their homes. The LHRRLP is focused on providing loans for residents located in rural areas of the state. Nonrural area residents of the state currently receive funding from the Community Development Block Grant Program for the purpose of maintaining their homes, while rural areas do not have funding available for this purpose.  If it is not possible to create a statewide program for this purpose, the goal is to provide similar funding opportunities for those located in rural areas of the state.

The recent change to this legislation that requires the loan amount to be based on the assessed value of the property, rather than the appraised value, is a positive change.  While the change may cause a slight decrease in the amount of funds available to LHRRLP participants, the change provides a better safeguard for the state's investment.

(Opposed) None.

Persons Testifying: Senator Honeyford, prime sponsor; Seth Dawson, Washington State Community Action Partnership, National Alliance on Mental Illness, Washington; and Dave Finet, Washington State Community Action Partnership.

Persons Signed In To Testify But Not Testifying: None.