Modifications to housing programs under the Wisconsin Housing and Economic Development Authority, the official text

2025 - 2026 LEGISLATURE
LRB-2643/1
MDE:klm&cjs

2025 ASSEMBLY BILL 194
April 15, 2025 - Introduced by Representatives Armstrong, Brooks, Anderson, Brown, DeSmidt, Donovan, Doyle, Emerson, Franklin, Goodwin, Green, Hysell, B. Jacobson, Joers, Kitchens, Kreibich, Krug, Melotik, Murphy, Mursau, Neubauer, Novak, O'Connor, Ortiz-Velez, Palmeri, Penterman, Piwowarczyk, Roe, Spiros, Udell and Goeben, cosponsored by Senators Quinn, Feyen, Jagler, Dassler-Alfheim, Habush Sinykin, James, Pfaff, Ratcliff, Spreitzer, Wall, Wirch and Smith. Referred to Committee on Housing and Real Estate.

An Act to repeal 234.66 (1) (g) 2., 234.66 (1) (g) 3., 234.661 (1) (c) 5., 234.661 (1) (c) 6., 234.662 (1) (e) 3. and 234.662 (1) (e) 4.; to renumber and amend 234.66 (1) (b), 234.66 (4) (a) 5., 234.661 (1) (e), 234.661 (3) (b) 3., 234.662 (1) (c), 234.662 (1) (f) and 234.662 (3) (b) 3.; to consolidate, renumber and amend 234.66 (1) (g) (intro.) and 1.; to amend 234.66 (4) (a) 7., 234.66 (4) (c) 2., 234.66 (5) (c), 234.66 (5m) (b), 234.661 (1) (b), 234.661 (3) (b) (intro.), 234.661 (3) (b) 4., 234.661 (3) (b) 5., 234.661 (3) (c), 234.661 (3) (d), 234.661 (3m) (b), 234.661 (5) (b) 4., 234.662 (1) (d), 234.662 (1) (e) (intro.), 234.662 (1) (g), 234.662 (3) (b) (intro.), 234.662 (3) (b) 4., 234.662 (3) (b) 5., 234.662 (3) (c), 234.662 (3) (d) 2., 234.662 (3m) (b) and 234.662 (5) (b) 4.; to create 234.66 (1) (b) 1., 234.66 (1) (b) 2., 234.66 (4) (a) 5. b., 234.661 (1) (cm), 234.661 (1) (e) 2., 234.661 (3) (b) 3. b., 234.661 (3) (em), 234.662 (1) (c) 2., 234.662 (1) (em), 234.662 (1) (f) 2., 234.662 (3) (b) 3. b. and 234.662 (3) (fm) of the statutes; relating to: modifications to
housing programs under the Wisconsin Housing and Economic Development Authority.

Analysis by the Legislative Reference Bureau
This bill makes modifications to three housing programs administered by the Wisconsin Housing and Economic Development Authority: the residential housing infrastructure revolving loan program, also known as the Infrastructure Access Program; the main street housing rehabilitation revolving loan program, also known as the Restore Main Street Program; and the commercial-to-housing conversion revolving loan program, also known as the Vacancy-to-Vitality Program.
For the Infrastructure Access Program, the bill does all of the following:
1. Allows a loan to a developer to provide up to 33 percent of total project costs and a loan to a governmental unit to provide up to 25 percent of total project costs. Under current law, a loan to a developer may provide up to 20 percent of total project costs and a loan to a governmental unit may provide up to 10 percent of total project costs.
2. Allows tribal housing authorities or business entities created by a tribal council to receive loans as developers of eligible projects.
For the Restore Main Street Program, the bill does all of the following:
1. Allows a loan to provide up to $50,000 per dwelling unit or 33 percent of total project costs, whichever is less. Under current law, a loan may provide up to $20,000 per dwelling unit or 25 percent of total project costs, whichever is less.
2. Requires WHEDA to divide the state into regions based on the service jurisdiction of each regional planning commission constituted under current law, with the counties not served by a regional planning commission constituting collectively one region. Under the bill, of the moneys appropriated to the program’s revolving loan fund in the 2023-25 fiscal biennium, WHEDA must expend any remaining unencumbered moneys in such a way that no region receives in loans more than 12.5 percent of the total amount of the moneys appropriated in the 2023-25 fiscal biennium.
3. Allows loans to be awarded to projects under the jurisdiction of a federally recognized American Indian tribe or band.
For the Vacancy-to-Vitality Program, the bill does all of the following:
1. Allows a loan to provide up to 33 percent of total project costs related to constructing residential housing and eliminates the dollar amount cap on loans. Under current law, a loan may provide up to $1,000,000 per project or 20 percent of total project costs, whichever is less.
2. Permits housing developments with four or more dwelling units to be eligible for a loan if the housing development is located in a governmental unit with a population of 10,000 or less. Under current law, an eligible housing development must have 16 or more dwelling units.
3. Allows a project converting a vacant commercial building to a mixed-use development that contains residential housing to be eligible for a loan under the program. Under current law, to be eligible for a loan, a construction project must convert a vacant commercial building to residential housing. Under the bill, a loan awarded for the conversion of a vacant commercial building to a mixed-use development must be for costs associated with constructing residential housing within the mixed-use development.
4. Requires WHEDA to divide the state into regions based on the service jurisdiction of each regional planning commission constituted under current law, with the counties not served by a regional planning commission constituting collectively one region. Under the bill, of the moneys appropriated to the program’s revolving loan fund in the 2023-25 fiscal biennium, WHEDA must expend any remaining unencumbered moneys in such a way that no region receives in loans more than 12.5 percent of the total amount of the moneys appropriated in the 2023-25 fiscal biennium.
5. Allows tribal housing authorities or business entities created by a tribal council to receive loans as developers of eligible projects.
For all three of the programs, the bill does all of the following:
1. Permits eligible projects to benefit from a tax incremental district and to use historic tax credits. Under current law, eligible projects may not benefit from a tax incremental district or use historic tax credits.
2. Allows a loan to be awarded for projects on tribal reservation or trust lands not subject to property taxes in this state if the land is designated as tribal reservation or trust lands on the effective date of the bill.
3. In applying for a loan, requires that, in addition to the current law requirement that a governmental unit establish that it has reduced the cost of housing in connection with the eligible project, a governmental unit establish that it has reduced the cost of housing within the governmental unit, generally.
4. Allows a governmental unit to satisfy the loan eligibility condition that it update the housing element of the statutorily required local government comprehensive plan if, within the 5 years immediately preceding the date of the loan application, the governmental unit adopts an ordinance or resolution certifying that the housing element of the governmental unit’s current comprehensive plan provides an adequate housing supply that meets existing and forecasted housing demand in the governmental unit.
5. Allows a loan to be secured by a corporate guarantee. Under current law, a loan under any of the three programs must be secured by a personal guarantee.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

Section 1. 234.66 (1) (b) of the statutes is renumbered 234.66 (1) (b) (intro.) and amended to read:

234.66 (1) (b) (intro.) “Developer” means a person other than a governmental unit that constructs or creates residential housing. and that is any of the following:
Section 2. 234.66 (1) (b) 1. of the statutes is created to read:
234.66 (1) (b) 1. A person other than a governmental unit.
Section 3. 234.66 (1) (b) 2. of the statutes is created to read:
234.66 (1) (b) 2. A tribal housing authority or business entity created by a tribal council.
Section 4. 234.66 (1) (g) (intro.) and 1. of the statutes are consolidated, renumbered 234.66 (1) (g) and amended to read:
234.66 (1) (g) “Residential housing” means new single-family or multifamily housing for rent or sale that satisfies all of the following: 1. Is is subject to taxation under ch. 70 or that is not subject to taxation under ch. 70 because, on the effective date of this paragraph .... [LRB inserts date], it is designated as reservation lands, as defined in s. 165.92 (1) (a), or trust lands, as defined in s. 165.92 (1) (d).
Section 5. 234.66 (1) (g) 2. of the statutes is repealed.
Section 6. 234.66 (1) (g) 3. of the statutes is repealed.
Section 7. 234.66 (4) (a) 5. of the statutes is renumbered 234.66 (4) (a) 5. (intro.) and amended to read:
234.66 (4) (a) 5. (intro.) The eligible governmental unit has reduced the cost of residential housing in connection with the eligible project by voluntarily revising zoning ordinances, subdivision regulations, or other land development regulations to increase development density, expedite approvals, reduce impact, water connection, and inspection fees, or reduce parking, building, or other development costs with respect to the development of residential housing supported by the
project. The governmental unit’s revisions to the ordinances or regulations shall include revisions that were made in connection with the eligible project and revisions that generally apply to residential housing projects within the governmental unit. For purposes of this subdivision, the governmental unit in cooperation with the developer shall submit to the authority a cost reduction analysis in a form prescribed by the authority and signed by the developer and the head of the governmental unit’s governing body that shows the includes the following:
a. Information that clearly shows the estimated time or dollar amount saved by the developer and the estimated percentage reduction in housing costs for each cost reduction measures measure, including any time saving measures measure, undertaken by the governmental unit on or after January 1, 2023, that have has reduced the cost of residential housing in connection with the eligible project. The signed analysis shall clearly show for each time saving or cost reduction measure the estimated time or dollar amount saved by the developer and the estimated percentage reduction in housing costs.
Section 8. 234.66 (4) (a) 5. b. of the statutes is created to read:
234.66 (4) (a) 5. b. Information that clearly shows the estimated time or dollar amount reduction and the estimated percentage reduction in housing costs for each cost reduction measure, including any time saving measure, undertaken by the governmental unit on or after January 1, 2023, that generally applies to residential housing projects within the governmental unit and that has reduced the cost of residential housing within the governmental unit. These cost and time saving measures may include the cost and time saving measures of the eligible project.

Section 9. 234.66 (4) (a) 7. of the statutes is amended to read:
234.66 (4) (a) 7. If applicable, the eligible governmental unit has updated the housing element of its comprehensive plan under s. 66.1001 (2) (b) within the 5 years immediately preceding the date of the loan application. This condition may be satisfied if, within the 5 years immediately preceding the date of the loan application, the governmental unit adopts an ordinance or resolution certifying that the housing element of its current comprehensive plan provides an adequate housing supply that meets existing and forecasted housing demand in the governmental unit.
Section 10. 234.66 (4) (c) 2. of the statutes is amended to read:
234.66 (4) (c) 2. No loan awarded under this subsection may exceed 20 33 percent of the total cost of development, including land purchase, of the residential housing supported by the eligible project.
Section 11. 234.66 (5) (c) of the statutes is amended to read:
234.66 (5) (c) No loan awarded under this subsection may exceed 10 25 percent of the amount of the total cost of development of the residential housing supported by the eligible project.
Section 12. 234.66 (5m) (b) of the statutes is amended to read:
234.66 (5m) (b) Require that the full amount of each loan awarded under sub. (4) is secured by one or more unlimited personal or corporate guarantees, unless the developer provides no personal or corporate guarantee on any first mortgage for the eligible project and the developer’s total debt associated with the project does not exceed 75 percent of the total collateral value of the project, as determined by the authority.

Section 13. 234.661 (1) (b) of the statutes is amended to read:
234.661 (1) (b) “Eligible political subdivision governmental unit” means the city, village, town, or county governmental unit having jurisdiction over an eligible project, as determined by the authority.
Section 14. 234.661 (1) (c) 5. of the statutes is repealed.