Housing Trust Fund

Item 108 #3s

Language
Page 77, line 9, strike "$40,049,112" and insert "$50,049,112".
Page 78, after line 3 insert:
"G.1. There is hereby created the Virginia Housing Trust Fund, hereafter referred to as "the Fund."  Out of the amounts in this appropriation, $10,000,000 the second year from the general fund shall be deposited into the Fund.  Interest earned on moneys in the Fund shall remain in the Fund and be credited to it.  Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund.
2. The Department shall use 80 percent of the moneys from the Fund solely to provide gap financing for low interest loans through eligible organizations.  All such funds shall be repaid to the credit of the Fund.  Loans may be provided for:
a. Affordable rental housing to include new construction, rehabilitation, repair, or acquisition of housing to assist low or moderate income citizens, including land and land improvements;
b. Down payment and closing cost assistance for homebuyers;
c. Short, medium and long term loans to reduce the cost of homeownership and rental housing; and,
d. Funding for rehabilitation and revitalization of existing housing, to include accessibility and energy conservation.
3.  The Department shall use 20 percent of the moneys from the Fund solely to provide grants through eligible organizations for targeted efforts to reduce homelessness, including:
a.  Temporary rental assistance, not to exceed one year;
b.  Housing stabilization services in permanent supportive housing for homeless individuals and families; and,
C.  Pre-development assistance for permanent supportive housing and other long term housing options for the homeless.
4. Organizations eligible for funding from the Fund shall include the following: (i) localities; (ii) local government housing authorities; (iii) nonprofit organizations that provide assistance to low or moderate income citizens of Virginia and are exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, as amended; and (iv) regional or statewide housing assistance organizations that provide assistance to low and moderate income or low-income citizens of Virginia and are exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, as amended."

Explanation
(This amendment creates and capitalizes the Housing Trust Fund with an initial appropriation of $10.0 million from the general fund that is provided from the Commonwealth's portion of the Mortgage Servicing Settlement Agreement. The settlement provides Virginia a total of $409.9 million in benefits, including; $294.3 million for loan modifications, short sale/deed in lieu approvals, deficiency waivers and transitional funds; $31.1 million to approximately 15,000 borrowers of the five banks included in the settlement, or approximately $2,000 per borrower, regardless of any wrongdoing; $84.3 million for refinancing for underwater borrowers, or borrowers with existing loans that have over a 5.25 percent interest rate. In addition, the Commonwealth will receive a one-time payment of $65.9 million to partially offset the state's loss in revenue related to the mortgage crisis. Out of this amount, $10.0 million is provided in this amendment for the Housing Trust Fund and the balance is provided in a companion amendment to Item 472.10 as one-time education funding to localities in recognition of the adverse impact of the mortgage crisis on local property tax revenue.)