Senate hearing examines $50 million HOME grant to lower housing infrastructure costs

Senator Brad Beckettall introduced Senate Bill 2,225 at a hearing of the Government Operations Division Committee, saying the bill would create a one‑time $50 million HOME (Housing for Opportunity, Mobility and Empowerment) grant program administered by the North Dakota Department of Commerce to help political subdivisions lower the cost of infrastructure needed for new affordable and market‑rate housing projects.

The bill would let Commerce set grant guidelines, require a dollar‑for‑dollar local match and require Commerce to report to legislative management and the governor on program activity. Commerce Commissioner Chris Shilkin told the committee “Commerce will administer the $50,000,000 HOME program designed to address housing needs by reducing infrastructure development costs for affordable and market rate housing.” The bill includes an emergency clause to allow funds to be deployed quickly and lists June 30, 2027, as the program authorization effective date.

Supporters told the committee the program focuses on infrastructure — water, sewer, roads, utility hookups and other site work — rather than direct construction subsidies, to reduce the upfront cost of building lots and housing. Commissioner Shilkin outlined planned allocation brackets in testimony: $10,000,000 for communities with population under 5,000; $20,000,000 for communities between 5,000 and 20,000; $15,000,000 for communities above 20,000 (with a maximum award of $1,500,000 per project); and $5,000,000 for rural metro areas within 20 miles of a city center over 20,000. The program would require a dollar‑for‑dollar match composed equally of funds from the political subdivision, a local developer and private sources (donations, local development corporations or in‑kind contributions).

Governor Kelly Armstrong told the committee the proposal is intended to be flexible for local needs: “A community decides the type of housing they need and which contractor they want to build the project,” he said, arguing the state, local and private sectors would each contribute to infrastructure costs so projects could move forward.

Don Morgan, president and CEO of the Bank of North Dakota, described a complementary, internal bank program — described in testimony as a market mechanism to buy certain loans that cannot be sold on the secondary market because of appraisal issues in rural areas. Morgan said that program does not require an appropriation and would operate at market rates to help solve end‑financing bottlenecks that can prevent completed homes from being financed and resold.

Mortgage banker Joe Sheehan and several local and regional economic development officials, builders and chambers of commerce testified in support. Sheehan summarized borrower impact modeling that illustrated how lowering a typical lot cost by roughly $40,000 could reduce monthly payments materially for buyers in several markets; he framed the program as a way to expand new inventory and relieve pressure on older existing housing stock. Economic development witnesses from Grafton, Rugby, Watford City, Fargo and other cities described local labor and appraisal challenges and urged flexibility in allowed uses of grant funds for site work, lot elevation, buy‑downs of special assessments and other locally needed items.

Committee members asked about budget status and whether the appropriation is already in Commerce’s base budget. Testimony from the Department of Commerce and others clarified that the bill includes the appropriation authority and high‑level criteria but that the detailed administrative guidelines would be developed by Commerce. Commerce told the committee it would provide a program status report to the governor and legislative management by June 30, 2026 listing expenditures, units supported, applications received and matching funds secured.

No formal vote was taken during the hearing; the committee closed the hearing on SB 2,225 after receiving testimony and indicated it would take up next steps later.