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2021 Utah Code
Title 35A - Utah Workforce Services Code
Chapter 8 - Housing and Community Development Division
Part 5 - Olene Walker Housing Loan Fund
Section 504.5 - Low-income ADU loan guarantee pilot program.
Universal Citation: UT Code § 35A-8-504.5 (2021)
Effective 5/5/2021
35A-8-504.5. Low-income ADU loan guarantee pilot program.
Enacted by Chapter 102, 2021 General Session
35A-8-504.5. Low-income ADU loan guarantee pilot program.
- (1) As used in this section:
- (a) "Accessory dwelling unit" means the same as that term is defined in Section 10-9a-103.
- (b) "Borrower" means a residential property owner who receives a low-income ADU loan from a lender.
- (c) "Lender" means a trust company, savings bank, savings and loan association, bank, credit union, or any other entity that provides low-income ADU loans directly to borrowers.
- (d) "Low-income ADU loan" means a loan made by a lender to a borrower for the purpose of financing the construction of an accessory dwelling unit that is:
- (i) located on the borrower's residential property; and
- (ii) rented to a low-income individual.
- (e) "Low-income individual" means an individual whose household income is less than 80% of the area median income.
- (f) "Pilot program" means the two-year pilot program created in this section.
- (2) The executive director shall establish a two-year pilot program to provide loan guarantees on behalf of borrowers for the purpose of insuring the repayment of low-income ADU loans.
- (3) The executive director may not provide a loan guarantee for a low-income ADU loan under the pilot program unless:
- (a) the lender:
- (i) agrees in writing to participate in the pilot program;
- (ii) makes available to prospective borrowers the option of receiving a low-income ADU loan that:
- (A) has a term of 15 years; and
- (B) charges interest at a fixed rate;
- (iii) monitors the activities of the borrower on a yearly basis during the term of the loan to ensure the borrower's compliance with:
- (A) Subsection (3)(c); and
- (B) any other term or condition of the loan; and
- (iv) promptly notifies the executive director in writing if the borrower fails to comply with:
- (A) Subsection (3)(c); or
- (B) any other term or condition of the loan;
- (b) the loan terms of the low-income ADU loan:
- (i) are consistent with the loan terms described in Subsection (3)(a)(ii); or
- (ii) if different from the loan terms described in Subsection (3)(a)(ii), are mutually agreed upon by the lender and the borrower; and
- (c) the borrower:
- (i) agrees in writing to participate in the pilot program;
- (ii) constructs an accessory dwelling unit on the borrower's residential property within one year after the day on which the borrower receives the loan;
- (iii) occupies the primary residence to which the accessory dwelling unit is associated:
- (A) after the accessory dwelling unit is completed; and
- (B) for the remainder of the term of the loan; and
- (iv) rents the accessory dwelling unit to a low-income individual:
- (A) after the accessory dwelling unit is completed; and
- (B) for the remainder of the term of the loan.
- (a) the lender:
- (4) At the direction of the board, the executive director shall make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to establish:
- (a) the minimum criteria for lenders and borrowers to participate in the pilot program;
- (b) the terms and conditions for loan guarantees provided under the pilot program, consistent with Subsection (3); and
- (c) procedures for the pilot program's loan guarantee process.
- (5) The executive director shall submit a report on the pilot program to the Business and Labor Interim Committee on or before November 30, 2023.
Enacted by Chapter 102, 2021 General Session
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