1.    The housing incentive fund is created as a special revolving fund at the Bank of North Dakota. The housing finance agency may direct disbursements from the fund and a continuing appropriation from the fund is provided for that purpose.

2.     a.    After a public hearing, the housing finance agency shall create an annual allocation plan for the distribution of the fund as authorized under subsection 3.

b.    The annual allocation plan must give priority to provide housing for individuals and families of low or moderate income. For purposes of this priority, eligible    income limits are determined as a percentage of median family income as published in the most recent federal register notice. Under this priority, the annual allocation plan must give preference to projects that benefit households with the lowest income and to projects that have rent restrictions at or below department of housing and urban development published federal fair market rents or department of housing and urban development section 8 payment standards.

c.    At least ten percent of the fund must be used to assist developing communities to address an unmet housing need or alleviate a housing shortage.

3.    The housing finance agency shall adopt guidelines for the fund so as to address unmet housing needs in this state. Assistance from the fund may be used solely for:

a.    New construction, rehabilitation, preservation, or acquisition of a multifamily housing project; b.    New construction, rehabilitation, preservation, or acquisition of a single-family housing project in a developing community or a community land trust project; c.    Gap assistance, matching funds, and accessibility improvements; d.    Assistance that does not exceed the amount necessary to qualify for a loan using underwriting standards acceptable for secondary market financing or to make the project feasible; and

e.    Rental assistance, emergency assistance, barrier mitigation, or services designated to prevent or end homelessness.

4.    Eligible recipients include units of local, state, and tribal government; local and tribal housing authorities; community action agencies; regional planning councils; and nonprofit organizations and for-profit developers of residential housing. Individuals may not receive direct assistance from the fund.

5.    Except for subdivision d of subsection 3, assistance is subject to repayment or recapture under the guidelines adopted by the housing finance agency. Any assistance that is repaid or recaptured must be deposited in the fund and is appropriated on a continuing basis for the purposes of this section.

6.    The agency may collect a reasonable administrative fee from the fund, project developers, applicants, or grant recipients. The origination fee assessed to grant recipients may not exceed five percent of the project award.

7.    Upon request, the housing finance agency shall report to the industrial commission regarding the activities of the housing incentive fund.

8.    At least once per biennium, the housing finance agency shall provide a report to the budget section of the legislative management regarding the activities of the housing incentive fund.