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SB 277

Utah Homes Investment Program Amendments

2026 General Session Introduced by Val Peterson and 1 co-sponsor

Expands UHIP financing to more housing projects and participants, removing interest-rate caps and adding a post-program economic study to assess local impacts.

Senate/ filed
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Bill Summary · SB 277

Overview

SB 277, Utah Homes Investment Program Amendments, would modify and expand the Utah Homes Investment Program (UHIP). The bill broadens the types of projects that can receive financing through qualified depositories, allows additional participants (including certain municipalities with eligible shelters) to access program financing, introduces a required post-program economic study, and relaxes certain loan-rate limits. The measure contains technical amendments and aligns program definitions with expanded project eligibility. No new state revenue is appropriated in the bill.

Purpose and intent

  • Expand the scope of projects eligible for UHIP financing.
  • Increase access to low-interest financing for housing development, affordable rental projects, housing improvements, and attainable home ownership.
  • Allow municipalities with eligible shelters to participate in UHIP financing.
  • Commission a post-program economic impact study to assess local benefits and inform future policy.
  • Remove previous caps on the interest rate that qualified depositories may offer for UHIP financing.
  • Make technical and conforming changes to statute to reflect expanded purposes.

Key provisions and changes

  • Expanded eligible projects for qualified depositories:
    • Multi-family housing development projects that meet criteria.
    • Affordable rental projects.
    • Acquisition of housing development projects that meet criteria.
    • City-operated programs that provide low-interest loans to income-eligible homeowners for improvements.
  • Municipal participation:
    • A qualifying municipality with an eligible shelter may obtain UHIP financing.
  • Post-program study:
    • After the program ends, the state treasurer must study the economic impact of UHIP.
    • The treasurer may contract with a third party to complete the study.
  • Removal of rate limitation:
    • The statutory cap on the interest rate a qualified depository may charge for UHIP financing is removed, allowing potentially higher rates.
  • Definitions and governance:
    • Retains and refines definitions for attainable homes, affordable rental projects, qualified depositories, and qualified projects.
    • Expands the concept of “qualified municipal project” to include:
    • A city project that uses deposits to acquire/rehabilitate single-family homes to be attainable homes, with owner-occupancy restrictions for five years.
    • An affordable rental project with revenue sharing with tenants.
    • A city program providing low-interest homeowner loans for improvements with deed restrictions to promote owner-occupancy.
  • Deposit terms and repayment:
    • Details the deposit agreement with qualified depositories, including rate terms (tied to federal funds rate plus/minus adjustments) and specified repayment timelines (e.g., 24 months, or upon loan repayment, sale of last home, or June 30, 2028, with specific conditions for Utah Housing Corporation).
    • The Utah Housing Corporation has its own deposit-return rules, potentially aligning with loan repayments or sale proceeds.
  • Penalties:
    • Noncompliance by a developer, qualifying city, or qualified depository results in disqualification from UHIP participation.
  • Credit unions:
    • An exception to standard credit union lending requirements allowing state or federally chartered credit unions to make UHIP-qualified loans, with deposits per the program rules.
  • Repeal and sunset considerations:
    • The bill includes repeal dates for related provisions in Title 51 and certain other Utah Code sections, indicating a framework for eventual sunset of program-related statutory sections unless renewed.

Who is affected

  • Developers and cities (first- and second-class cities) participating in or seeking UHIP financing.
  • Qualified depositories (banks, and potentially the Utah Housing Corporation) that provide financing under UHIP.
  • Utah residents and households seeking attainable homes or affordable rental housing as part of UHIP projects.
  • Municipalities with eligible shelters that qualify for UHIP-based financing.
  • State Treasurer’s Office and potentially a third-party contractor for the mandated economic impact study.
  • Credit unions that engage in UHIP lending activities.

Procedural and timeline aspects

  • Effective date: May 6, 2026.
  • Program-related provisions include a scheduled near-term study and reporting timeline:
    • Beginning after June 30, 2028, the treasurer must study whether UHIP lending yielded measurable local economic benefits.
    • By October 1, 2028, the treasurer must submit a study report to the Legislative Management Committee and the governor. The treasurer may contract with a third party for this study.
  • Repeal dates are embedded for related code sections, with references to sunsets in 2028-2030 ranges, suggesting a phased reevaluation of program authorities and related funding mechanisms.
  • Fiscal note indicates a potential one-time cost of about $100,000 in FY 2027 for contracting the third-party study; otherwise, enactment is not expected to generate net new state revenue.

Summary of potential impacts

  • Increased housing supply and variety through expanded UHIP financing eligibility (multi-family, affordable rental, acquisitions, and city programs).
  • Greater municipal participation, including cities with eligible shelters, potentially expanding local housing interventions.
  • Potentially higher loan financing rates for qualified projects due to removal of interest rate caps, with net aggregate impact on borrowers and cities uncertain.
  • An evaluative framework to measure economic benefits post-implementation, informing future policy decisions.
  • Administrative and contracting costs for the Treasurer’s Office to conduct the required study.

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

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