HOUSE BILL No. 4495 April 15, 1999, Introduced by Reps. Kukuk, Birkholz, Voorhees, LaSata, Byl and Jansen and referred to the Committee on Local Government and Urban Policy. A bill to create an urban homestead program for single-family public housing; to provide that certain local gov- ernmental units, public housing entities, nonprofit community organizations, and certain state entities create and administer urban homestead programs for single-family public housing; to prescribe the powers and duties of certain state and local gov- ernmental units, public housing entities, and nonprofit community organizations; and to provide for the disposition of personal and real property. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. This act shall be known and may be cited as the 2 "urban homesteading in single-family public housing act". 3 Sec. 2. As used in this act: 4 (a) "Homestead agreement" means a written contract between a 5 housing commission and a qualified buyer that contains the terms 01246'99 * JLB 2 1 under which the qualified buyer may acquire the single-family 2 public housing property. 3 (b) "Housing commission" means a housing commission or hous- 4 ing authority as defined under section 3 of the housing coopera- 5 tion law, 1937 PA 293, MCL 125.603. 6 (c) "Housing project" means that term as defined under 7 section 3 of the housing cooperation law, 1937 PA 293, MCL 8 125.603. 9 (d) "Michigan state housing development authority" means the 10 Michigan state housing development authority created under sec- 11 tion 21 of the state housing development authority act of 1966, 12 1966 PA 346, MCL 125.1421. 13 (e) "Nonprofit community organization" means an organization 14 exempt from taxation under section 501(c)(3) of the internal rev- 15 enue code of 1986 with experience in housing issues and that con- 16 tracts with a housing commission to administer an urban home- 17 steading program for single-family public housing under this 18 act. 19 (f) "Qualified buyer" means a person who meets the criteria 20 in section 4. 21 (g) "Qualified loan rate" means an interest rate not to 22 exceed the adjusted prime rate determined in section 23 of 1941 23 PA 122, MCL 205.23, minus 1 percentage point as determined by the 24 department of treasury. 25 (h) "Single-family housing" means housing accommodations 26 designed as a residence for not more than 1 family. 01246'99 * 3 1 Sec. 3. By resolution, and subject to federal and state 2 law, a housing commission or a nonprofit community organization 3 appointed by the housing commission may operate an urban home- 4 stead program in single-family public housing to administer a 5 homesteading program that makes single-family public housing 6 properties available to eligible buyers to purchase under this 7 act. 8 Sec. 4. An applicant who meets all the following criteria 9 is eligible to enter into a homestead agreement to acquire 10 single-family public housing property as a qualified buyer under 11 this act: 12 (a) The applicant or his or her spouse is employed and has 13 been employed for the immediately preceding 12 months. 14 (b) The applicant or his or her spouse has not been con- 15 victed of a felony within the immediately preceding 3-year period 16 as determined by the housing commission or nonprofit community 17 organization appointed by the housing commission. 18 (c) All school age children of the applicant or his or her 19 spouse who will reside in the single-family public housing prop- 20 erty attend school regularly as determined by the housing commis- 21 sion or nonprofit community organization appointed by the housing 22 commission. 23 (d) The applicant and his or her spouse have income below 24 the median for the state of Michigan as determined by the United 25 States department of housing and urban development, for families 26 with the same number of family members of the applicant and his 27 or her spouse. 01246'99 * 4 1 (e) The applicant and his or her spouse are drug free as 2 determined by the housing commission. 3 Sec. 5. (1) A qualified buyer may apply to the housing com- 4 mission or nonprofit community organization appointed by the 5 housing commission to acquire the single-family public housing 6 property. The application shall be in a form and in a manner 7 provided by the housing commission or nonprofit community organi- 8 zation appointed by the housing commission. If the application 9 is approved, the qualified buyer and housing commission or non- 10 profit community organization appointed by the housing commission 11 shall enter into a homestead agreement for the single-family 12 public housing property. The housing commission or nonprofit 13 community organization appointed by the housing commission shall 14 determine the terms and conditions to the homestead agreement. 15 (2) If the qualified buyer is in substantial compliance with 16 the terms of the homestead agreement for not less than 5 years or 17 if the qualified buyer has resided in the single-family public 18 housing property before the housing commission or nonprofit com- 19 munity organization appointed by the housing commission adopts 20 the urban homesteading program under this act, resides in that 21 property for not less than 5 years, meets the criteria in the 22 homestead agreement, continues to meet the criteria in section 4, 23 and has otherwise substantially met his or her financial obliga- 24 tions with the housing commission, the housing commission or non- 25 profit community organization appointed by the housing commission 26 shall transfer legal ownership of that single-family public 27 housing property to the qualified buyer for $1.00. However, if 01246'99 * 5 1 the housing commission received federal funds for which bonds or 2 notes were issued and those bonds or notes are outstanding for 3 that housing project, the housing commission shall transfer legal 4 ownership to the qualified buyer only upon payment of the pro 5 rata share of the bonded debt on that specific property by the 6 qualified buyer. The housing commission shall obtain the appro- 7 priate releases from the holders of the bonds or notes. 8 Sec. 6. The Michigan state housing development authority 9 may provide loans to qualified buyers who are required to pay the 10 pro rata portion of the bonded debt on the single-family public 11 housing. Loans provided under this section shall be made at a 12 rate of interest not to exceed the qualified rate. The Michigan 13 state housing development authority shall determine the terms and 14 conditions of the loan agreement. Loans made by the Michigan 15 state housing development authority may be prepaid or paid off at 16 any time without penalty. 17 Sec. 7. If a waiver of federal law, rule, or policy is 18 needed to implement this act, the housing commission and the 19 Michigan state housing development authority shall work together 20 to obtain the appropriate waivers from the appropriate federal 21 authorities. 22 Sec. 8. Every 2 years, the housing commission or the non- 23 profit community organization appointed by the housing commission 24 shall hire an independent auditor to audit the books and accounts 25 of the urban homesteading program for single-family public hous- 26 ing operated by the housing commission or nonprofit community 01246'99 * 6 1 organization. Upon completion, the audit report shall be made 2 available to the public. 01246'99 * Final page. JLB