AN ACT Relating to prevention of homelessness; amending RCW 43.185.050 and 43.185.070; and adding a new chapter to Title 43 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that persons have been rendered homeless or are in imminent danger of becoming homeless as a result of a sudden job loss or other economic adversity.

The legislature further finds that it is more economical and more socially desirable to enable people to retain possession of their houses or apartments and thereby avoid homelessness, than to house them in emergency shelters or in other facilities intended for short-term occupancy.

The legislature declares that a program designed to provide short-term financial assistance to assist with mortgage or rent payments and coordination of available support services is needed to keep people from becoming homeless.

NEW SECTION. Sec. 2. (1) The department of community development shall establish the homelessness prevention program to provide grants and technical assistance to local governments who operate homelessness prevention programs. The grants shall be to provide loans of temporary rental or mortgage assistance to persons or families in imminent danger of losing housing as a result of having insufficient income to pay mortgage or rental costs. The technical assistance shall help local governments develop and implement strategies to prevent homelessness. To be eligible for grants under this program, recipient local governments shall designate an agency to administer the local homelessness prevention program.

(2) The grant funds shall be placed by the recipient local government in a revolving loan fund and deposited in a bank or savings institution in an account that is separate from all other funds of the recipient local government. The funds and interest earned on these funds shall be utilized for the benefit of the local homelessness prevention program.

(3) The recipient local government shall establish priorities of eligibility for temporary mortgage or rental assistance to assist persons in retaining housing. The recipient local government shall make a determination of eligibility regarding the person's or family's eligibility to participate in the local homelessness prevention program. A determination shall include, but is not limited to: (a) A determination that the person or family is subject to immediate eviction for nonpayment of rent or foreclosure for nonpayment of mortgage installments, when nonpayment is attributable to illness, unemployment, underemployment, or any other failure of resources beyond the person's control; (b) a verification of the loss of income; and (c) a determination that the person or family does not have the financial resources to make the required rental payment or mortgage installment.

(4) No person or family shall continue to receive temporary mortgage or rental assistance under this chapter if alternative sources of rental or mortgage assistance under federal, state, or local sources becomes available.

NEW SECTION. Sec. 3. The department of community development shall adopt rules to implement this chapter, including but not limited to: (1) The maximum lengths of assistance available through this chapter; (2) the eligibility of and the application process for local governments; (3) the criteria by which grants and technical assistance shall be provided to local governments; (4) the criteria local governments shall use in entering into contracts with persons or families to make mortgage or rental assistance payments on their behalf; and (5) the local governments' efforts to coordinate other support programs for the person or family, such as job search or job retraining programs.

NEW SECTION. Sec. 4. The department of community development may receive such gifts, grants, or endowments from public or private sources, as may be made from time to time, in trust or otherwise, to be used by the department for its programs, including the homelessness prevention program. Funds from the housing trust fund, chapter 43.185 RCW, up to two hundred fifty thousand dollars, may be used for the homelessness prevention program by the department of community development, provided all the requirements of this chapter and chapter 43.185 RCW are met.

Sec. 5. Section 6, chapter 298, Laws of 1986 and RCW 43.185.050 are each amended to read as follows:

(1) The department shall use funds from the housing trust fund to finance in whole or in part any loans or grant projects that will provide housing for persons and families with special housing needs and with incomes at or below fifty percent of the median family income for the county or standard metropolitan statistical area where the project is located. Not less than thirty percent of such funds used in any given biennium shall be for the benefit of projects located in rural areas as defined in 63 Stat. 432, 42 U.S.C. Sec. 1471 et seq.

(2) Activities eligible for assistance include, but are not limited to:

(a) New construction, rehabilitation, or acquisition of low and very low-income housing units;

(b) Rent subsidies in new construction or rehabilitated multifamily units;

(c) Matching funds for social services directly related to providing housing for special-need tenants in assisted projects;

(d) Technical assistance, design and finance services and consultation, and administrative costs for eligible nonprofit community or neighborhood-based organizations;

(e) Administrative costs for housing assistance groups or organizations when such grant or loan will substantially increase the recipient's access to housing funds other than those available under this chapter;

(f) Shelters and related services for the homeless;

(g) Mortgage subsidies for new construction or rehabilitation of eligible multifamily units;

(h) Mortgage insurance guarantee or payments for eligible projects; ((~~and~~))

(i) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing; and

(j) Grants and technical assistance to local governments under the homelessness prevention program established under chapter 43.-- RCW (sections 1 through 4 of this act).

Sec. 6. Section 8, chapter 298, Laws of 1986 as amended by section 1, chapter 286, Laws of 1988 and RCW 43.185.070 are each amended to read as follows:

(1) During each calendar year in which funds are available for use by the department from the housing trust fund, as prescribed in RCW 43.185.030, the department shall announce to all known interested parties, and through major media throughout the state, a grant and loan application period of at least ninety days' duration. This announcement shall be made as often as the director deems appropriate for proper utilization of resources, but at least twice annually. The department shall then promptly grant as many applications as will utilize available funds less appropriate administrative costs of the department, not to exceed thirty-seven thousand five hundred dollars in the fiscal year ending June 30, 1988, and seventy-five thousand dollars in the fiscal year ending June 30, 1989, and not to exceed five percent of annual revenues to the fund thereafter.

(2) The department shall give first priority to applications for projects and activities which utilize existing privately owned housing stock including privately owned housing stock purchased by nonprofit public development authorities. Such projects and activities shall be evaluated under subsection (3) of this section. Second priority shall be given to activities and projects which utilize existing publicly owned housing stock. Such projects and activities shall be evaluated under subsection (3) of this section.

(3) The department shall give preference for applications based on the following criteria:

(a) The degree of leveraging of other funds that will occur;

(b) Recipient contributions to total project costs, including allied contributions from other sources such as professional, craft and trade services, and lender interest rate subsidies;

(d) Projects that encourage ownership, management, and other project-related responsibility opportunities;

(e) Projects that demonstrate a strong probability of serving the original target group or income level for a period of at least fifteen years;

(f) The applicant has the demonstrated ability, stability and resources to implement the project;

(g) Projects which demonstrate serving the greatest need; and

(h) Projects that provide housing for persons and families with the lowest incomes.

(4) Applicants that request assistance through the homelessness prevention program established under chapter 43.-- RCW (sections 1 through 4 of this act) shall not be required to meet the criteria under subsection (3) (b) and (f) of this section.

NEW SECTION. Sec. 7. Sections 1 through 4 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 8. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.