1. Executive Summary
This bill amends ORC §122.98 and enacts §§122.982 and 122.983 to modify the Residential Development Revolving Loan Program by expanding permitted loan uses, altering borrower requirements, establishing a three‑tier county population system for loan distribution, and changing loan amount caps.
2. What This Bill Would Do
[122.98(B)] modifies eligible borrower criteria. The amendment text reflects eligibility requiring population ≤75,000 and building permit issuance below the state average. This provision would retain those criteria unchanged.
[122.98(C)] expands permitted loan uses. Current law allows proceeds only for infrastructure (water, sewer, transport, electric, gas) for single‑family dwellings. This provision would also allow proceeds “to offset, defray, or otherwise make more affordable costs related to the construction of residential dwellings” including conversion of commercial structures to residential. Prohibition on routine maintenance and over‑scale upgrades remains.
[122.98(D)] modifies project approval requirements. Current law requires: (1) project located in eligible county; (2) net density ≥4 units per acre; (3) zoned exclusively single‑family; (4) no qualified low‑income building receiving LIHTC (26 U.S.C. 42).
[122.98(F), (G), (J)] sets loan administration rules. This provision would require rolling applications beginning no later than January 1, 2026; prohibit any fees on applicants or recipients; and set the interest rate equal to the effective federal funds rate. These provisions are unchanged from current law.
[122.98(I)] adds a clarification to scoring metrics. Current law prohibits considering whether a project is located in an economically distressed area. This provision would add an explicit prohibition on “weighting preference based on the poverty rate in the jurisdiction or census tract in which the project is located.”
[122.982, 122.983] creates a three‑tier population‑based system for the revolving loan program:
Tier 1: population less than 100,000
Tier 2: population 100,000 to 500,000
Tier 3: population more than 500,000
The bill initially funds each tier equally. Loan repayments are credited to the originating tier. The director may redistribute funds between tiers with a minimum 12‑month interval and a cap that no tier may hold more than twice the funds of any other tier. The director shall evaluate the program on an ongoing basis.
3. Who is Affected
Affected Group | If the bill passes | If the bill does not pass | Governing Section |
|---|---|---|---|
Counties, townships, municipal corporations with population ≤75,000 and below‑average building permits | May apply for loans; must exempt local standards (square footage, parking, garage), complete traffic reviews in 45 days, provide quarterly reports | Continue under existing §122.98 | 122.98(B), (H) |
Ohio Department of Development | Must administer rolling applications without fees; develop scoring metrics that prohibit poverty‑rate weighting | Continues current administration | 122.98(F), (G), (I) |
Director of Development | Must evaluate program; may redistribute funds between three tiers with 12‑month interval and 2:1 cap | No tier‑redistribution authority | 122.983 |
Counties with population <100,000 (Tier 1) | Explicit funding tier – initially funded equally with other tiers | No statutory tier system | 122.982(A) |
Counties with population 100,000–500,000 (Tier 2) | Explicit funding tier – initially funded equally | No statutory tier system | 122.982(B) |
Counties with population >500,000 (Tier 3) | Explicit funding tier – initially funded equally | No statutory tier system | 122.982(C) |
Residential development projects in economically distressed areas | Lose any prior scoring preference based on poverty‑rate weighting (metrics shall not consider poverty rate) | Current law prohibits considering “economically distressed area” but does not explicitly reference poverty‑rate weighting | 122.98(I)(3) |
4. Existing Law vs. What Would Change
Current Law (ORC §122.98 effective Sept. 30, 2025) | What This Bill Changes (H.B. 857) |
|---|---|
(A) Findings: access to affordable housing in rural areas is identified as part of state policy. Public policy to increase availability of single‑family homes in rural areas. | Amends (A) – Changes public policy to increase availability of residential housing in this state (removes “single‑family homes in the rural areas”). Findings clause otherwise unchanged. |
(C) Proceeds exclusively for infrastructure needed for single‑family dwellings. No routine maintenance or exceeding projected requirements. | Amends (C) – Adds second permitted use: proceeds may also offset construction costs of residential dwellings, including commercial‑to‑residential conversion. Prohibitions remain. |
(D) Department shall not approve unless project: (1) in eligible county; (2) net density ≥4 units/acre; (3) zoned exclusively single‑family; (4) no qualified low‑income building receiving LIHTC. | [Verification required] – The provided PDF formatting does not clearly show whether these requirements are removed, retained, or modified. |
(E)(2) Loan amount ≤50% of infrastructure cost OR ≤$30,000 per dwelling. | [Verification required] – The bill text shows a new flat cap of $800,000. Formatting artifacts make it unclear whether the prior caps are removed or remain as alternatives. |
(I)(3) Scoring metrics shall not consider whether project is located in an economically distressed area. (No mention of poverty rate weighting.) | Amends (I)(3) – Adds explicit prohibition on “weighting preference based on the poverty rate in the jurisdiction or census tract.” |
No statutory tier system for the revolving loan program. | Enacts §§122.982, 122.983 – Creates three explicit tiers (under 100k, 100k–500k, over 500k). Equal initial funding. Redistribution authority with 12‑month interval and 2:1 cap. Ongoing evaluation. |
(J) Interest rate = effective federal funds rate; proceeds credited to revolving loan fund. | Unchanged – Section (J) identical. |
(H) Borrower obligations (exempt local standards, 45‑day traffic reviews, quarterly reports, repayment). | Substantively unchanged – Minor renumbering only. |
5. Fiscal Impact Summary
No CBO score, official fiscal note, LSC analysis, or committee report is available for this legislation. Fiscal impact cells are left blank pending official scoring.
6. Household Impact Matrix
For a household earning 35,000–35,000–100,000 annually. No official household‑level or fiscal analysis is available.
Metric | If Bill Passes | If Bill Fails or Status Quo Continues |
|---|---|---|
Household Overhead | No direct tax, utility, or insurance change specified. Indirect effects depend on loan implementation. | No official baseline projection available. |
Market Stability | Bill authorizes infrastructure loans and construction‑cost offsets. Actual effect on housing supply depends on borrower applications, departmental approval, and private investment. | No change to current housing market conditions under existing law. |
Mobility Check | Bill does not modify income eligibility thresholds, benefits cliffs, or create direct upward mobility conditions. | No official mobility analysis for current law was identified. |
Local Government Impact | Borrowers must exempt local standards (square footage, parking, garages) and complete traffic reviews within 45 days. No state mandate for local funding is specified. | Current local regulatory authority remains unchanged. |
7. Provisions Requiring Review
Section | Issue Type | Why It Needs Review | Recommended Action |
|---|---|---|---|
122.98(B) + 122.982 | Inconsistent thresholds | Eligibility cap is 75,000. Tier system includes counties up to >500,000. Unclear whether Tier 2 and Tier 3 counties (>75,000) can receive loans or if tiers are only for fund distribution among eligible borrowers. | Verify against enrolled bill. |
122.98(C)(2) | Undefined term | “Exceed the projected requirements” – no statutory definition. | Await agency rulemaking. |
122.98(D) | Ambiguous formatting | Provided PDF does not clearly show whether density, zoning, and LIHTC requirements are removed or retained. | Compare with official enrolled bill as it is amended. |
122.98(E)(2) | Ambiguous formatting | Unclear whether the 800,000 cap replaces or supplements the prior 30,000‑per‑dwelling caps. | Verify against enrolled bill. |
122.98(I) | Director authority to define scoring rules | “Greater housing need,” “lack of private housing investment,” “regional distributive balance” – undefined. | Monitor for published scoring criteria. |
122.98(H)(2) | Incomplete specification | “Complete any required traffic reviews or studies within 45 days” – does not specify who conducts reviews, standards, or consequences for delay. | Check cross‑references to state or local traffic codes. |
8. What This Bill Does Not Do
The bill does not contain provisions for direct subsidies, grants, or vouchers to individual homebuyers or renters.
The bill does not contain provisions for eviction moratoriums, rent control, or tenant protections.
The bill does not create or expand low‑income housing tax credit (LIHTC) programs directly. However, current law (in some readings) references qualified low‑income buildings under 26 U.S.C. 42 — the bill’s effect on that reference is [verification required].
9. Plain Language Definitions
Term | Definition |
|---|---|
Revolving loan fund | A pool of money where repaid loans are reused for new loans. |
Effective federal funds rate | The benchmark short‑term interest rate set by the Federal Reserve. |
Economically distressed area | Not defined in bill; left to director discretion. |
Regional distributive balance | Not defined in bill; left to director discretion. |
LIHTC | Federal Low‑Income Housing Tax Credit program (26 U.S.C. 42). |
Decennial census | The nationwide census conducted every ten years by the U.S. Census Bureau. |
Census tract | A small, relatively permanent geographic area used by the U.S. Census Bureau for statistical analysis, typically containing 1,200 to 8,000 people. |
Infrastructure cost | Expenses related to water, sewer, transportation, electric, or gas systems necessary for residential development. |
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