SB238 Alabama 2024 Session

Summary

Primary Sponsor

Randy PriceSenator

Republican

Session

Regular Session 2024

Title

Home Buyers Initiative Act; alternative housing programs, funding mechanism further provided

Summary

SB238 expands how money in Alabama's Mortgage Guarantee Fund can be used by allowing extra funds to support other housing programs once the fund is depleted.

What This Bill Does

The bill maintains the Mortgage Guarantee Fund, administered by the Alabama Housing Finance Authority, to reimburse foreclosure losses on qualified Home Buyers Initiative loans. It adds that after funds from the Alabama Capital Improvement Trust Fund are exhausted, any additional money added to the Mortgage Guarantee Fund can be used for other housing programs, including alternative housing programs and homeowner education. Payments to investors follow a priority order: first from the initial $6 million appropriation, then from interest or investment income, and finally from fund fees. The fund remains available until depleted, and if depleted or if the balance is large enough to cover withdrawals, remaining funds and future fees may be redirected to other housing programs identified by the program administrator.

Who It Affects

• Homebuyers and investors participating in the Alabama Home Buyers Initiative, whose foreclosure loss reimbursements may be redirected to other housing programs once the Mortgage Guarantee Fund is depleted.
• Housing program administrators and the Alabama Housing Finance Authority, who gain flexibility to allocate funds to a broader set of housing programs, including alternative housing programs and homeowner education.

Key Provisions

• Amends Section 24-1A-43 to allow additional funds appropriated to the Mortgage Guarantee Fund, after depletion of initial funds, to be used for other housing programs including alternative housing programs.
• Keeps the Mortgage Guarantee Fund as a state treasury-held fund administered by AHFA to reimburse foreclosure losses for qualified mortgage loans under the Alabama Home Buyers Initiative.
• Requires mortgage guarantee fund fees paid at closing to be deposited into the fund and credits interest or investment income to the fund.
• Specifies that reimbursements are paid in the order that foreclosure loss certifications are received, up to 40% of each loan's foreclosure balance.
• Provides that if the fund is depleted or if the fund balance exceeds the maximum available withdrawal, the remaining balance and all future mortgage guarantee fund fees may be used for other housing programs identified and administered by the program administrator, including homeowner education.
• Effective date: October 1, 2024.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Authorities, Boards, & Commissions