Representative outlines exploratory plan to use deferred‑tax fund for small closing‑cost grants
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Summary
Rep. E. Warner Raschke presented House Bill 4051 as an idea to provide up to 1% of a home’s purchase price (with a 3% down requirement and a proposed applicant cap) to help first‑time buyers with closing costs, funded by surplus in the Homestead Property Tax Deferral Program; committee members asked detailed questions about repayment, caps and implementation timelines.
Representative E. Warner Raschke presented an exploratory concept for House Bill 4051 during an informational segment of the House Committee on Housing and Homelessness on Feb. 19, describing a pilot approach to help first‑time homebuyers with closing costs.
Raschke framed the proposal as a way to reuse an underutilized portion of the Homestead Property Tax Deferral Program to help buyers who otherwise can afford monthly mortgages but are stymied by closing costs. "House Bill 4,051 is an idea that I came up with when I was listening to a podcast," Raschke said.
Key proposal details presented: Raschke described a program that would require a 3% down payment from the buyer, offer up to 1% of the purchase price toward closing costs (for example, $4,000 on a $400,000 home), and include a cap on participants (a proposal of the first 500 applicants was mentioned). He said the assistance would function with a lien repaid to the state when the property is sold and that the lien would carry 6% simple interest—paralleling mechanics in the Homestead Property Tax Deferral Program.
Committee questions and clarifications: Members asked whether the fund should instead be applied to down payments (a commonly cited barrier), how quickly the Department of Revenue could disburse funds to meet typical 30–45 day closing windows, whether counties would be affected, and what income or price caps would apply. Raschke acknowledged several details remain to be worked out, said an inadvertent income cap line in the draft was copied from the homestead program and not intended, and confirmed counties would not be made whole or harmed by the proposal because the state would hold the fund.
Why it matters: Committee members noted closing costs and concessions can vary widely and that program design must consider mortgage product differences, appraisal and valuation issues, and how to avoid excessive leverage for borrowers. Rep. Raschke said the proposal was not ready for enactment in the short session but offered it as a policy idea to develop further.
Ending: The committee discussed the concept, requested follow‑up details, and shifted to reschedule an unrelated smoke alarm information item for a future meeting; no formal action was taken on HB 4051 at this session.
