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SB 1261

IHDA-HOMEOWNERSHIP PROGRAMS

104th Regular Session Introduced by Li Arellano and 11 co-sponsors

Expands IHDA homeownership aid to buyers/owners in community land trusts (CLTs) and creates a Task Force to scale CLTs statewide for affordable, stable homeownership.

Public Act . . . . . . . . . 104-0370
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Bill Summary · SB 1261

SB 1261 — Community Land Trust Home Ownership Act (Public Act 104‑0370)

Status and timeline
- Introduced: Feb 13, 2025 (Sen. Graciela Guzmán).
- Passed both chambers: May 2025.
- Signed by the Governor: June 20, 2025.
- Effective date: September 1, 2025.
- Public Act number: 104‑0370.

Purpose and intent
- To expand access to Illinois Housing Development Authority (IHDA) homeownership loan products, grants, and other assistance for buyers and owners of homes held under a community land trust (CLT) or similar leasehold ownership structure where the ground lease is with a 501(c)(3) nonprofit.
- To support long‑term affordability, preserve affordable housing, curb displacement, and advance equitable homeownership (including addressing racial homeownership disparities).

Key provisions
1. IHDA program eligibility (Section 20)
- IHDA homeownership programs (loans, grants, other assistance) must be made available to buyers/owners purchasing or maintaining housing where a leasehold interest in the land is held by a community land trust or other 501(c)(3) organization that promotes long‑term affordability, preservation, or community revitalization.
- Explicit exclusion: other private or for‑profit sellers using leasehold arrangements (e.g., installment contracts, contracts for deed, or other ownership structures) are not eligible under this provision.

  1. Definitions (Section 15)

    • "Community land trust" is defined as a 501(c)(3) governed by a board composed of CLT residents, community residents and public representatives that provides permanent or long‑term affordability and shared‑equity homeownership.

  2. Rulemaking (Section 25)

    • IHDA must propose new or amended administrative rules within 90 days after the Act’s effective date to align its homeownership programs with the Act’s purposes.

  3. Community Land Trust Task Force (Sections 30–45)

    • Creates a Task Force housed at IHDA to implement the recommendations of the 2024 Community Land Trust Report and to explore mechanisms to scale CLTs statewide.
    • Membership includes state executive agency designees, legislative appointees, representatives from Illinois CLTs, a university housing expert, a national lab representative, statewide affordable housing advocates, and a nongovernmental sector member (vice‑chair). Co‑chairs: IHDA Executive Director (or designee), designated Senate member, and designated House member.
    • Appointment timeline and meetings: members to be appointed within 30 days after the effective date; initial meeting within 60 days; members serve without compensation.
    • Task Force duties (examples): explore state funding options (bond issuance, real estate transfer tax, Illinois Affordable Housing Trust Fund, other revenue streams), consider CLT incorporation into the local tax sale process, provide technical assistance to emerging CLTs, evaluate centralization models, and promote consistent tax assessment language (reporting and implementation steps truncated in text).

Who is affected / likely impacts
- Positive/targeted effects:
- Community land trusts and nonprofit leasehold models: improved access to IHDA financing and assistance should lower barriers for buyers/owners in CLT homes and support CLT growth statewide.
- Low‑ and moderate‑income households and communities of color: increased pathways to affordable, shared‑equity homeownership intended to support wealth‑building and limit displacement.
- Homeowners facing property tax distress: Task Force work on tax sale processes may produce protections or tools for CLT homeowners.
- Entities affected:
- IHDA: must amend rules and provide administrative support for the Task Force.
- Local governments and tax sale systems: may be examined for integration with CLT protections.
- For‑profit/private sellers using alternative ownership forms: remain ineligible for IHDA programs under this Act’s eligibility provision.

Procedural next steps / deadlines
- Act effective Sept 1, 2025.
- IHDA must propose rule changes within 90 days after the effective date (approx. by early Dec 2025).
- Task Force appointments within 30 days after the effective date; initial meeting within 60 days; ongoing meetings as needed to implement the 2024 report recommendations.

Limitations / notes
- The bill directs IHDA and the Task Force to explore and recommend funding mechanisms and policy changes; it does not itself appropriate new statewide funding for CLTs.
- Some duty descriptions in the enrolled text are truncated; final Task Force deliverables and timelines will depend on subsequent administrative work and rulemaking.

Compiled from official sources — confirm details with the bill’s official record.

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