Creates the Louisiana First-Generation Homebuyer Assistance Act

House Bill 794 creates the Louisiana First-Generation Homebuyer Assistance Act by enacting new sections 600.121 through 600.128 in Title 40 of the Louisiana Revised Statutes. The legislation establishes a new program administered by the Louisiana Housing Corporation to provide down payment and closing cost assistance to first-generation homebuyers through deferred, forgivable soft second mortgages. Assistance is structured as zero-percent-interest loans with a maximum of twenty-five thousand dollars per qualified buyer or the actual down payment and closing costs, whichever is less. The loans are forgiven completely if the recipient occupies the property as a primary residence for five consecutive years, but if the property is sold, refinanced, or transferred before that period ends, the assistance is repaid on a pro-rated basis with one-fifth of the balance forgiven for each complete year of occupancy.

The legislation affects first-generation homebuyers throughout Louisiana who meet strict eligibility criteria: they must have household income not exceeding one hundred twenty percent of area median income, with at least fifty percent of annual funds reserved for those at or below eighty percent of AMI; must be first-generation owners as defined by not owning a home in the three years before application and having parents who did not own during the applicant's childhood, or alternatively having grown up in foster care or without permanent housing; must complete a HUD-approved eight-hour homebuyer education course; must agree to occupy the home as primary residence for five years; and must not own any other real property at closing. Priority goes to applicants purchasing homes in targeted census tracts with homeownership rates at least twenty percentage points below the statewide average. Participating lenders face certification requirements including commitment to offer qualified mortgage products, annual fair lending and implicit bias training for loan officers, quarterly demographic reporting on applications and approvals, and community outreach in targeted areas. The corporation must conduct proactive marketing in communities with historically low homeownership rates, particularly African American, Hispanic, and rural communities, through partnerships with churches, community organizations, historically black colleges and universities, and social service agencies.

The program operates within Louisiana's existing housing finance framework under the Louisiana Housing Corporation's administrative structure and draws on multiple funding sources including an initial fifteen million dollar appropriation from the Louisiana Capital Outlay Fund, repayments from property sales or refinances, federal HOME Investment Partnerships Program and Community Development Block Grant funds, and private contributions. The legislation functions alongside existing HUD homebuyer education requirements and the underwriting standards established for qualified mortgages, which are defined to exclude balloon payments in the first ten years and limit interest rates to no more than two percentage points above the average prime offer rate. The statutory framework creates detailed reporting requirements to measure program effectiveness by tracking applicant demographics, geographic distribution of recipients, fund flows, and homeownership rate impacts in targeted census tracts over time.