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Bill Summary · HB 5509

Summary of Bill HB 5509 (Mountain Homes Act)

Jurisdiction: West Virginia | Session: 2026 | Introduced: February 13, 2026
Sponsors: Delegates Ferrell, Fehrenbacher, Rohrbach, Linville (co-sponsors: Rohrbach, Linville, Ferrell, Fehrenbacher)

1) Purpose and Intent

  • Establishes the Mountain Homes Act to remove barriers to funding for housing construction with the goal of supporting a sustainable quality of life for West Virginia’s workforce.
  • Creates the Mountain Homes Fund (special revenue fund) to provide loan guarantees for qualifying residential projects, aiming to stimulate housing development and related economic activity.

2) Key Provisions and Changes

A. General Provisions (Article Mountain Homes Act)

  • Short title: Mountain Homes Act (Part I: General)
  • Legislative findings emphasize the need for housing development to support economic growth and workforce quality of life.
  • Definitions set the framework for terms used throughout the act (e.g., applicant, private entity, project, infrastructure, eligible lender, final loan/loan guarantee agreement).
  • Rulemaking authority granted to the Department of Economic Development (for rules, including emergency rules). Rules may be issued without requiring organized labor participation.

B. Creation and Governance of the Mountain Homes Fund (Part II)

  • Establishes Mountain Homes Fund in the State Treasury.
  • Fund sources: surplus revenues, gifts/grants, contributions, earnings, and legislative appropriations.
  • The Department of Economic Development (DED) administers the fund and may invest through the West Virginia Investment Management Board or the Board of Treasury Investments.
  • Fund purposes: to offer loan guarantees for qualifying construction loans meeting Act requirements.
  • Exemption: Fund operations are exempt from certain insurance and banking regulation, but public funds obligations remain subject to public record rules when public funds are involved.
  • Recordkeeping and audit: Annual independent CPA audit; detailed recordkeeping; internal controls required.
  • Reporting: Annual report to the Joint Committee on Government and Finance and the Governor with project-specific data (outstanding financing, private investment, number of residences built/under construction, time-to-sale metrics, etc.).

C. Eligibility, Applications, and Funding Caps (Part III)

  • Eligibility criteria for loan guarantees:
    • Applicant must be licensed in WV, current on state taxes, demonstrate creditworthiness, and locate in WV.
    • Project must have appraised value of at least $800,000 and include at least six residential units in a subdivision, development, or gated community.
    • Demonstrate timely start/completion prospects and potential to boost local employment and commercial opportunities.
    • Applicants must have unconditional approval from an eligible lender for a loan covering up to 50% of the anticipated project cost; lender must certify inability to approve without the guarantee and require cash reserves for the remaining 50%.
    • Projects must sell completed units between $150,000 and $300,000 as of July 1, 2026, with annual adjustments tied to average wage changes.
    • Compliance with local government criteria (utilities, stormwater control, binding HOA arrangements, maintenance of private roads and common areas, HOA duration and dues).
    • Public Offering Statement required.
    • Compliance with WV Alcohol and Drug-Free Workplace Act.
  • Application process:
    • Written application to DED with detailed project description, financials, location, evidence of lender approval, and other requested information.
    • Annual cap: aggregate cost of all projects in a fiscal year cannot exceed $10 million.
    • Minimum project value/size requirement for any single project in a given year: at least $800,000 or at least six residential units; mobile homes not permitted.
    • DED decision timeline: determinations within 60 days of receipt (or after additional information is provided).
    • Final approval decisions are binding and not subject to review.
  • Guarantee terms and limitations (Part IV references):
    • Coverage limited to a 50% guarantee of the Mountain Homes project, with a maximum guarantee amount of $400,000.
    • Final loan/guarantee term up to 5 years, or project completion date if earlier; amortization up to 20 years.
    • Subordinate liens or security interests may be required.
    • In event of borrower default, lender must notify the department; 30-day cure period; if not cured, the department pays the lender and may pursue recovery from the borrower with interest (liens subordinate to lender liens).

  • Project administration and certification (Part IV):

    • DED issues project approvals/certifications and can decertify or revoke approvals for noncompliance, shoddy workmanship, or fraud.
    • DED may prioritize areas with high demand for residential homes.

  • False statements penalty (Part V):

    • Making false statements to influence department action or financial assistance is a misdemeanor with up to $1,000 fine and/or up to 1 year in jail.

3) Who/What Is Affected

  • Eligible lenders: Banks and other lenders that provide construction loans and participate in the program.
  • Private developers and entities constructing Mountain Homes projects (six or more homes, at least $800,000 in project value).
  • Homebuyers and residents within Mountain Homes projects (unit sale price targeted between $150,000 and $300,000, with corresponding development and HOA structures).
  • Local governments and utilities involved in project approvals (planning, utilities, stormwater management, and HOA requirements).
  • Department of Economic Development: administers the fund, approves projects, issues guarantees, and oversees compliance and reporting.

4) Procedural and Timeline Aspects

  • Effective date for final loan or loan guarantee agreements and public-private partnerships: January 1, 2027.
  • Sunset date: January 1, 2037, after which the Act expires unless extended or renewed; ongoing projects remain in effect to completion.
  • Annual reporting to the Joint Committee on Government and Finance and the Governor is required, including project-specific metrics and time-to-sale data.
  • Annual fund auditing and strict financial controls required; annual CPA audit.
  • Project approvals and guarantee decisions are to be made within 60 days of application receipt (or after any requested information is provided).

5) Notes and Considerations

  • The bill emphasizes workforce housing needs and aims to support economic development by enabling financing for multi-unit residential projects.
  • Certain property types (e.g., timeshares, industrial/warehouse, airports) are explicitly excluded from Mountain Homes project property.
  • The program requires substantial private capital participation (up to 50% loan, with cash reserves) and ensures price controls to align with local wage levels.
  • The act provides significant flexibility to the Department of Economic Development to issue rules and manage the fund, with accountability measures through audits and annual reporting.

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

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