organization. (1) As used in this section: (a) "Housing organization" means an entity that: (i) manages a portfolio of investments; (ii) is dedicated to the preservation, enhancement, improvement, and rehabilitation of affordable housing through property investment; and (iii) is controlled by a registered nonprofit. (b) "Pass-through funding" means state money appropriated by the Legislature to the department with the intent that the department grant or otherwise disburse the state money to a third party. (c) "Rural" means the same as that term is defined in Section 35A-8-501. (2) (a) This section applies to funds appropriated by the Legislature to the department for pass- through to a housing organization. (b) The department shall ensure that pass-through funding granted or distributed before May 1, 2024 to a housing organization is subject to an agreement as described in this section, either through amending existing agreements or canceling existing agreements and issuing new agreements. (3) (a) The department shall create agreements governing the use of pass-through funding as described in this section. (b) Before a housing organization may accept pass-through funding pursuant to this section, the entity shall enter into an agreement with the department governing the use of pass-through funding. (4) An agreement for pass-through funding shall require, at a minimum: (a) the housing organization match pass-through funding with private funding at no less than a 70% private, 30% state split; (b) all pass-through funding be used by the housing organization to invest in housing units that are rented at rates affordable to households with an annual income at or below 80% of the area median income for a family within the county in which the housing is located; (c) that 50% of pass-through funding be used by the housing organization to invest in housing units that are rented at rates affordable to households with an annual income at or below 50% of the area median income for a family within the county in which the housing is located; (d) that at least 30% of pass-through funding be used by the housing organization to invest in housing units that are located in a rural county; (e) that any property purchased with pass-through funding be subject to a deed restriction for a minimum of 40 years to ensure the property remains a rental property affordable to households as described in Subsection (4)(b); (f) that returns on investment generated by pass-through funding shall be reinvested by the housing organization the same as if the returns on investment are pass-through funding; and (g) that the housing organization shall provide the division with the following information at the end of each fiscal year: (i) the housing organization's annual audit, including: (A) a third-party independent auditor's findings on the housing organization's compliance with this section and the terms of the housing organization's agreement for pass-through funding; and (B) the audited financial statements for a legal entity used by the housing organization to carry out activities authorized by this section; (ii) allocation of pass-through funds by county and housing type; (iii) progress and status of funded projects; and (iv) impact of pass-through funds on the availability of affordable housing across the state and by region. (5) The department shall include in the annual written report described in Section 35A-1-109 a report accounting for the expenditures authorized by a housing organization pursuant to an agreement with the department. Renumbered and Amended by Chapter 393, 2026 General Session
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