HB 541

02-25 13:24  H.B. 541
1First-Time Homebuyer Assistance Program Amendments
                                       2026 GENERAL SESSION
                                            STATE OF UTAH
                                    Chief Sponsor: Verona Mauga
                                       Senate Sponsor: Emily Buss
2
3   LONG TITLE
4   General Description:
5This bill amends provisions of the First-Time Homebuyer Assistance Program.
6   Highlighted Provisions:
7This bill:
8▸ amends the amount a first-time homebuyer may receive under the First-Time Homebuyer
9   Assistance Program for a certain type of property; and
10▸ makes technical and conforming changes.
11   Money Appropriated in this Bill:
12None
13   Other Special Clauses:
14None
15   Utah Code Sections Affected:
16   AMENDS:
1763H-8-501, as last amended by Laws of Utah 2025, Chapter 464
1863H-8-502, as last amended by Laws of Utah 2025, Chapter 464
19
20   Be it enacted by the Legislature of the state of Utah:
21Section 1. Section 63H-8-501 is amended to read:
2263H-8-501 . Definitions.
23      As used in this part:
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24   (1)(a) "First-time homebuyer" means an individual who satisfies:
25(i) the three-year requirement described in Section 143(d) of the Internal Revenue
26Code of 1986, as amended, and any corresponding federal regulations; and
27(ii) the requirements made by the corporation by rule, as described in Section
2863H-8-502.
29(b) "First-time homebuyer" includes a single parent, as defined by the corporation by rule, [
30made ]as described in Section 63H-8-502, who would meet the three-year
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31requirement described in Subsection (1)(a)(i) but for a present ownership interest in a
32principal residence in which the single parent:
33(i) had a present ownership interest with the single parent's former spouse during the
34three-year period;
35(ii) resided while married during the three-year period; and
36(iii) no longer:
37(A) has a present ownership interest; or
38(B) resides.
39  (2) "Home equity amount" means the difference between:
40      (a)(i) in the case of a sale, the sales price for which the qualifying residential unit is
41sold by the recipient in a bona fide sale to a third party with no right to repurchase
42less an amount up to 1% of the sales price used for seller-paid closing costs; or
43(ii) in the case of a refinance, the current appraised value of the qualifying residential
44unit; and
45      (b) the total payoff amount of any qualifying mortgage loan that was used to finance the
46purchase of the qualifying residential unit.
47  (3) "Program" means the First-Time Homebuyer Assistance Program created in Section
48      63H-8-502.
49  (4) "Program funds" means money appropriated for the program.
50  (5) "Qualifying mortgage loan" means a mortgage loan that:
51      (a) is purchased by the corporation; and
52      (b) is subject to a document that is recorded in the office of the county recorder of the
53county in which the residential unit is located.
54  (6) "Qualifying residential unit" means a residential unit that:
55      (a) is located in the state;
56      [(b) is new construction or newly constructed but not yet inhabited;]
57      [(c)] (b) is financed by a qualifying mortgage loan;
58      [(d)] (c) is owner-occupied within 60 days of purchase, or in the case of a two-unit
59dwelling, at least one unit is owner-occupied within 60 days of purchase; and
60      [(e)] (d) is purchased for an amount that does not exceed:
61(i) $450,000; or
62(ii) if applicable, the maximum purchase price established by the corporation under
63Section 63H-8-502.
64  (7) "Recipient" means a first-time homebuyer who receives program funds.
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65   (8)(a) "Residential unit" means a house, condominium, townhome, or similar residential
66structure that serves as a one-unit dwelling or forms part of a two-unit dwelling.
67(b) "Residential unit" includes a manufactured home or modular home that is attached to
68a permanent foundation.
69Section 2. Section 63H-8-502 is amended to read:
7063H-8-502 . First-Time Homebuyer Assistance Program.
71   (1) There is created the First-Time Homebuyer Assistance Program administered by the
72corporation.
73   (2) Subject to appropriations from the Legislature, the corporation shall distribute program
74funds to:
75(a) first-time homebuyers to provide support for the purchase of qualifying residential
76units; and
77(b) reimburse the corporation for a distribution of funds under Subsection (2)(a) that
78took place on or after July 1, 2023.
79   (3)(a) The maximum amount of program funds that a first-time homebuyer may receive
80under the program for a qualifying residential unit that is new construction or newly
81constructed but not yet inhabited is $20,000.
82(b) The maximum amount of program funds that a first-time homebuyer may receive
83under the program for an existing qualifying residential unit is $10,000.
84(c) No more than $1,000,000 of the program funds may be used for purposes described
85in Subsection (3)(b).
86   (4)(a) A recipient may use program funds to pay for:
87(i) the down payment on a qualifying residential unit;
88(ii) closing costs associated with the purchase of a qualifying residential unit;
89(iii) a permanent reduction in the advertised par interest rate on a qualifying mortgage
90loan that is used to finance a qualifying residential unit; or
91(iv) any combination of Subsections (4)(a)(i)[, (ii), and (iii)] through (iii).
92(b) The corporation shall direct the disbursement of program funds for a purpose
93authorized in Subsection (4)(a).
94(c) A recipient may not receive a payout or distribution of program funds upon closing.
95   (5) The builder or developer of a qualifying residential unit may not increase the price of
96the qualifying residential unit on the basis of program funds being used towards the
97purchase of [that] the qualifying residential unit.
98   (6)(a) In accordance with rules made by the corporation under Subsection (9), the
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99      corporation may adjust the maximum purchase price of a qualifying residential unit
100      for which a first-time homebuyer qualifies to receive program funds in order to
101      reflect current market conditions.
102      (b) In connection with an adjustment made under Subsection (6)(a), the corporation may
103establish one or more maximum purchase prices corresponding by residential unit
104type, geographic location, or any other factor the corporation considers relevant.
105      (c) The corporation may adjust a maximum purchase price under this Subsection (6) no
106more frequently than once each calendar year.
107  (7)(a) Except as provided in Subsection (7)(b), if the recipient sells the qualifying
108      residential unit or refinances the qualifying mortgage loan that was used to finance
109      the purchase of the qualifying residential unit before the end of the original term of
110      the qualifying mortgage loan, the recipient shall repay to the corporation an amount
111      equal to the lesser of:
112(i) the amount of program funds the recipient received; or
113(ii) 50% of the recipient's home equity amount.
114      (b) Subsection (7)(a) does not apply to a qualifying mortgage loan that is refinanced
115with a new qualifying mortgage loan if any subordinate qualifying mortgage loan, or
116loan from program funds used on the purchase of the qualifying residential unit, is
117resubordinated only to the new qualifying mortgage loan.
118  (8) Any funds repaid to the corporation under Subsection (7) shall be used for program
119      distributions.
120  (9) Subject to Subsection (9)(b), the corporation shall make rules, in accordance with Title
121      63G, Chapter 3, Utah Administrative Rulemaking Act:
122      (a) governing the application form, process, and criteria the corporation will use to
123distribute program funds to first-time homebuyers; and
124      (b) subject to appropriations from the Legislature, establishing an incentive program for
125qualified borrowers to utilize funding from the subordinate shared appreciation loan
126program for the purposes of assisting with the purchase of construction liability
127insurance for a qualifying condominium project.
128  (10) The corporation may use up to 5% of program funds for administration.
129  (11) The corporation shall report annually to the Economic and Community Development
130      Appropriations Subcommittee on disbursements from the program and any adjustments
131      made to the maximum purchase price or maximum purchase prices of a qualifying
132      residential unit under Subsection (6).
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133Section 3. Effective Date.
134   This bill takes effect on May 6, 2026.
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