1.1.................... moves to amend H.F. No. 2279, the first engrossment, as follows:
1.2Delete everything after the enacting clause and insert:

1.4    Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in
1.5this subdivision have the meanings given.
1.6(b) "Agency" means the Housing Finance Agency.
1.7(c) "Pilot program areas" means Hennepin, Olmsted, Ramsey, St. Louis, and Stearns
1.9(d) "The program" means the home values guarantee pilot program created in this
1.11    Subd. 2. Creation of program. (a) The home values guarantee pilot program is
1.12created to provide a five-year guarantee from the state against declining property values in
1.13certain areas of the state.
1.14(b) The agency shall administer the program and has for the purposes of this program
1.15all powers otherwise available to the agency. The agency may contract for all or any part
1.16of the administrative and related functions, and shall pay for any such services from the
1.17fees collected under subdivision 9, paragraph (a).
1.18    Subd. 3. Home values guarantee. (a) A purchaser of real estate may apply to the
1.19agency for enrollment of the property in the program. The property must:
1.20(1) be located in one of the pilot program areas;
1.21(2) be purchased or to be purchased between July 1, 2009, and June 30, 2011, by a
1.22buyer who intends to occupy the property as the buyer's single-family homestead;
1.23(3) be in a physical condition that complies with all applicable building and housing
1.24codes, as documented in a home inspection report conducted by a disinterested, qualified
2.1(4) be suitable for residential use only and not suitable for business or commercial
2.2use, including agriculture. This does not disqualify a property used for home-based
2.3businesses that complies with local zoning laws;
2.4(5) have an appraised value of no less than $75,000 nor more than $300,000, or no
2.5less than $30,000 nor more than $74,999 if the average property value for the municipality
2.6in which the property is located is between $30,000 and $74,999, based on an appraisal by
2.7a licensed and bonded professional appraiser with no conflict of interest with the potential
2.8owner of the property; and
2.9(6) be purchased or proposed for purchase without a mortgage loan, or with a
2.10mortgage loan made by a lender licensed to make residential mortgage loans in this
2.11state, that includes an interest rate and monthly payment that are fixed for the full term
2.12of the loan and a downpayment of at least 3.5 percent and no more than $25,000, by a
2.13borrower who meets mortgage loan underwriting criteria required for loans guaranteed by
2.14the Federal Housing Administration, but the borrower need not obtain a loan guarantee
2.15from that source. The requirement that the monthly mortgage payment be fixed does not
2.16apply to charges for escrowed property taxes, homeowner's insurance, flood zone status
2.17monitoring, or similar charges required by the mortgage lenders that may vary over the
2.18course of the loan. The downpayment must not have come from a junior mortgage loan on
2.19the property. A downpayment from a government program must be in the form of a loan
2.20in order to be considered towards the minimum downpayment amount.
2.21(b) To be eligible for the program, the purchaser of the property to be enrolled
2.22in the program must not have been convicted of fraud and must not have had a license
2.23revoked under chapter 82.
2.24(c) The agency shall issue to the new owner of a property that is approved for
2.25enrollment in the program a written guarantee on behalf of the state that the state will pay
2.26the owner, if the property has declined in value, the lesser of an amount equal to the
2.27downpayment and principal payments required under the loan made by the owner or the
2.28difference between the appraised value of the property at the time of purchase and the
2.29appraised value at the end of the five-year guarantee period, up to a maximum of $30,000.
2.30(d) The total dollar amount of guarantees issued must not exceed $25,000,000.
2.31    Subd. 4. Effect of resale or other transfer. If the purchaser transfers the fee title
2.32to the property prior to the end of the five-year guarantee period, the guarantee expires
2.33and is not assumable by the new owner. For purposes of this subdivision, "transfer"
2.34includes, but is not limited to, a voluntary or involuntary transfer through eminent domain,
2.35foreclosure, deed, contract for deed, probate, a transfer on death deed, a deed to a trust,
2.36or other transfer, other than a transfer between spouses.
3.1    Subd. 5. Effect of use as other than single-family principal residence. If
3.2the property is no longer homestead and owner-occupied as the owner's single-family
3.3principal residence at any time, the guarantee automatically expires.
3.4    Subd. 6. Procedure for claim on guarantee. (a) If an owner of a property that was
3.5issued a guarantee under this section wishes to make a claim under the guarantee, the
3.6owner shall submit a claim to the agency on a form provided by the agency.
3.7(b) No claim may be made later than 120 days after the end of the five-year
3.8guarantee period.
3.9(c) The appraised value of the property at the end of the five-year guarantee period
3.10must be based on an appraisal commissioned by the agency. If the homeowner disputes
3.11the value determined by the appraisal commissioned by the agency, the homeowner may
3.12obtain another appraisal conducted by a licensed and bonded professional appraiser and
3.13may submit the appraisal to the agency. The appraised value at the end of the five-year
3.14guarantee period shall be the average of the appraisal commissioned by the agency and the
3.15appraisal obtained by the homeowner. If all or a portion of the downpayment came from a
3.16government program, the amount of the guarantee payment equal to the amount of the
3.17downpayment from a government program must be paid to the government program in
3.18satisfaction of the loan.
3.19(d) The property must be free of any encumbrances such as mechanic's liens,
3.20second mortgages, or tax liens, and an inspection report done by a disinterested, qualified
3.21inspector must document that the property is in substantially the same condition as the
3.22original inspection report under subdivision 3, paragraph (a), clause (3), taking into
3.23consideration normal wear and tear on the property.
3.24(e) If the agency determines that the claim is payable under the terms of the
3.25guarantee, the agency shall pay the claim to the owner to whom the guarantee was made,
3.26or as otherwise provided for a spouse of the original owner under subdivision 5, from the
3.27appropriation made under subdivision 8.
3.28    Subd. 7. Pilot project features. (a) The agency shall report to the legislature in
3.29writing on the status and effects of the pilot project and on recommendations for changes
3.30or clarifications, if any, no later than February 15 of each year of the pilot project's
3.31existence and of each of the two years following its existence.
3.32(b) Each year's report shall assess the extent to which the program is stabilizing home
3.33values and influencing lenders and other holders of mortgage loans to restructure existing
3.34loans to reduce the likelihood of foreclosures and short sales in the pilot project areas.
3.35(c) The pilot project ends 120 days after the last guarantee under the program has
3.36expired or after the last guarantee claim is resolved, whichever is later.
4.1    Subd. 8. Statutory appropriation. (a) The amounts necessary to make payments
4.2required by guarantees issued under this section are appropriated from the general fund to
4.3the Housing Finance Agency for fiscal years 2015, 2016, and 2017, for the purposes of
4.4payments required under this section. The agency must not be liable to any person for
4.5recovery of guarantee funds if the funds appropriated to the agency are insufficient to
4.6pay the amounts claimed.
4.7(b) $70,000 is appropriated from the general fund in fiscal year 2009 to the agency
4.8to cover the administrative costs of starting the program.
4.9    Subd. 9. Application fee; creation of account; appropriation. (a) The agency
4.10shall charge a property owner applying for the program an application and administration
4.11fee in the amount of $90 at the time of application. The agency shall not accept an
4.12application unless the fee is paid.
4.13(b) The home values guarantee pilot program account is created in the special
4.14revenue fund.
4.15(c) The agency shall deposit fees received under paragraph (a) into the account
4.16created in paragraph (b)
4.17(d) Amounts in the account created under paragraph (b) are appropriated from that
4.18account for fiscal years 2010 and 2011 to the Housing Finance Agency for purposes of
4.19performing the agency's duties in administering this section.
4.20EFFECTIVE DATE.This section is effective July 1, 2009."
4.21Amend the title as follows:
4.22Page 1, line 5, delete "authorizing rulemaking;"