Department of Economic Development; selection of projects to receive assistance; disbursements; duties; schedule of uses of funds; annual reporting requirements; recapture funds; when.
Neb. Rev. Stat. § 58-708
in effect58-708. Department of Economic Development; selection of projects to receive assistance; disbursements; duties; schedule of uses of funds; annual reporting requirements; recapture funds; when.
(1) During each calendar year in which funds are available from the Affordable Housing Trust Fund for use by the Department of Economic Development, the department shall make its best efforts to allocate not less than thirty percent of such funds to each congressional district. The department shall announce a grant and loan application period of at least sixty days duration for all projects. Before an application for any new construction project can be submitted to the department, the land for the project shall be identified. In selecting projects to receive trust fund assistance, the department shall develop a qualified allocation plan and give first priority to financially viable projects that serve the lowest income occupants for the longest period of time. The qualified allocation plan shall:
(a) Set forth selection criteria to be used to determine housing priorities of the housing trust fund which are appropriate to local conditions, including the community's immediate need for affordable housing, proposed increases in home ownership, private dollars leveraged, level of local government support and participation, and repayment, in part or in whole, of financial assistance awarded by the fund; and
(b) Give first priority in allocating trust fund assistance among selected projects to those projects which are located in whole or in part within an enterprise zone designated pursuant to the Enterprise Zone Act or an opportunity zone designated pursuant to the federal Tax Cuts and Jobs Act, Public Law 115-97, serve the lowest income occupant, are located in an area that has been declared an extremely blighted area under section 18-2101.02, and are obligated to serve qualified occupants for the longest period of time.
(2) The Department of Economic Development shall disburse eighty percent of the amount awarded to a qualified recipient once the department approves such recipient for funding and shall disburse the remaining twenty percent of such amount, excluding general administration costs, housing management fees, lead-based paint test costs, and technical assistance costs, upon the completion of the project. The funds shall be held in an interest-bearing construction disbursement escrow account and shall be disbursed for qualified expenses upon sufficient presentation of partial lien releases and supporting invoices or receipts, as determined by the escrow company in the exercise of its duties. The escrow company shall be a licensed title insurance company, financial institution, or third-party law firm. Interest received from the funds while in escrow may be used to pay for the escrow company fees. The use of any additional interest shall be determined by the department. Any funds remaining in the escrow account after qualified expenses are paid shall be returned to the department.
(3)(a) Beginning on October 1, 2025, a qualified recipient shall submit to the Department of Economic Development a schedule of uses of funds for eligible activities on a quarterly basis, no later than thirty days after the end of each calendar quarter, during the time of performance under the award agreement.
(b) The schedule of uses of funds for eligible activities shall include an itemization of costs for eligible activities. If reasonable, the department may require source documentation and proof of payment, including, but not limited to, a paid invoice, completed payment, or cleared check, to be submitted with the schedule as evidence of appropriate use of funds. Qualified recipients shall ensure proper use of funds. The department is not responsible for the audit or approval of each of the qualified recipient's transactions involving funds.
(c) The department may initiate any of the following actions if a qualified recipient does not submit a schedule of uses of funds for eligible activities:
(i) Disqualification of the qualified recipient in pending applications for the Affordable Housing Trust Fund;
(ii) Disqualification of the qualified recipient in pending applications for other department programs;
(iii) Disqualification of the qualified recipient as an eligible applicant for Affordable Housing Trust Fund applications for up to twenty-four months from the date of the department action; or
(iv) Other actions deemed necessary by the department to meet the department's responsibility to ensure proper use of funds.
(4) Beginning July 1, 2027, the Department of Economic Development shall prescribe annual reporting requirements to collect sufficient information from qualified recipients to determine the amount of funds obligated to projects, the repayment terms of such funds, and the current balance of funds unspent or repaid. The reporting requirements shall also require qualified recipients to provide an accounting of awards granted for the purpose described in subdivision (10) of section 58-706, including the award amount and estimates related to equity earned on homes purchased with such awards. If a qualified recipient fails to meet the reporting requirements of this subsection, such qualified recipient may be required to return all awarded funds and transfer equity positions of recoverable housing assistance funds to the satisfaction of the department.
(5) The Department of Economic Development shall fund in order of priority as many applications as will utilize available funds less actual administrative costs of the department in administering the program. In administering the program, the department may contract for services or directly provide funds to other governmental entities or instrumentalities.
(6)(a) The Department of Economic Development may recapture any funds, including interest accrued in any escrow account, which were allocated to a qualified recipient for an eligible project through an award agreement if such funds were not utilized for eligible costs within the time of performance under the agreement and are therefore no longer obligated to the project.
(b) Upon completion of a project, the department shall recapture a percentage of the funds which were allocated to a qualified recipient for an eligible project through an award agreement equal to the percentage of the housing development the qualified recipient agreed to construct under the award agreement but failed to complete, along with any interest accrued on the funds. Any funds recaptured under this subdivision shall be credited to the Affordable Housing Trust Fund.
(c) A qualified recipient shall recapture any funds allocated to such recipient from the Affordable Housing Trust Fund that are provided to a homebuyer by the recipient as financial assistance for the purchase of a home upon sale of such home from the net proceeds of such sale, if any.
Laws 1996, LB 1322, § 18; Laws 2005, LB 40, § 3; Laws 2011, LB388, § 13; Laws 2014, LB800, § 5; Laws 2014, LB906, § 17; Laws 2015, LB457, § 1; Laws 2017, LB217, § 3; Laws 2019, LB86, § 8; Laws 2019, LB87, § 1; Laws 2025, LB288, § 11; Laws 2026, LB768, § 6. Effective Date: July 18, 2026
Source: Nebraska Legislature (nebraskalegislature.gov)URL: https://nebraskalegislature.gov/laws/statutes.php?statute=58-708Fetched: 10/20/2026