AN ACT relating to affordable housing, making an appropriation therefor, and declaring an emergency.
SB 142 creates a new state housing program centered on rehabilitating vacant and abandoned residential properties and returning them to productive use. It establishes the abandoned home pool fund in the State Treasury, administered by the Kentucky Housing Corporation, and authorizes the corporation to make loans or grants to eligible nonprofit housing entities for acquiring, rehabilitating, and in some cases repairing homes occupied by eligible renters. The bill defines eligible properties as long-vacant, deteriorated homes that have faced code violations or are otherwise uninhabitable, and it limits participating organizations to Kentucky 501(c)(3) nonprofits with housing or repair experience.
The bill also creates a rent-to-own style structure for rehabilitated properties. Eligible renters must have household income at or below 120% of area median income and complete HUD-certified homeownership counseling before leasing. Rent is tied to the total project cost and spread over 240 monthly payments, after which title must be transferred to the renter. The bill requires a 20-year deed restriction, gives the corporation a right of first refusal, and allows eviction after three missed payments. If a renter is evicted or leaves after making more than 48 payments, the bill provides a partial equity refund from the fund. The bill also bars discrimination in the sale or rental of units funded under the program.
To finance the fund, SB 142 amends county clerk fee statutes and directs $2 from certain recording fees and mortgage recordings into the abandoned home pool fund, while also increasing those fees slightly. It further appropriates $25 million in General Fund money for fiscal year 2026-2027 to seed the program. The act is declared an emergency and is set to take effect July 1, 2026. In addition to the new housing program, the bill makes related changes to county clerk fee distributions and record-storage funding rules.
Overall sentiment appears supportive of the bill’s affordable-housing goals, based on the bill’s emergency declaration and the absence of recorded opposition, votes, or committee testimony in the provided materials. The framing emphasizes urgent housing assistance and reuse of abandoned properties, suggesting a policy consensus around expanding housing supply and rehabilitation funding. However, because no committee discussion or vote history is included, there is no direct evidence of debate in the record provided.
The main points of potential contention are likely to be the funding mechanism, the long-term deed restrictions, and the program’s rent-to-own structure. Counties and clerks may be sensitive to the fee changes and remittance requirements, while nonprofit housing providers may scrutinize the administrative rules, right of first refusal, and repayment/equity provisions. Renters could also be affected by the strict payment schedule and eviction trigger, even though the bill offers a partial equity refund in some cases.
SB 142 adds a new set of provisions to KRS Chapter 198A creating the abandoned home pool fund and authorizing the Kentucky Housing Corporation to finance acquisition, rehabilitation, and related housing assistance activities for vacant and abandoned residential properties. It also amends KRS 64.012 to redirect a portion of county clerk recording fees into both the affordable housing trust fund and the new abandoned home pool fund, while increasing certain recording fees. The bill appropriates $25 million in General Fund money for FY 2026-2027 and establishes ongoing reporting, administration, and regulatory authority for the program.
The available record suggests generally favorable sentiment toward the bill, with the measure presented as an urgent affordable-housing response and no committee transcripts or votes showing opposition. The emergency clause and large initial appropriation indicate strong policy support for accelerating housing rehabilitation and assistance. At the same time, the bill’s financing changes and strict program terms could draw practical concerns from county clerks, local governments, and housing providers, though those concerns are not documented in the materials provided.
Likely areas of contention include the new fee diversions from county clerk services, the $25 million General Fund appropriation, and the administrative burden placed on the Kentucky Housing Corporation and participating nonprofits. The 20-year deed restriction, the corporation’s right of first refusal, and the requirement that renters complete homeownership counseling before leasing may also be debated as limits on flexibility. The eviction rule after three missed payments and the partial equity refund formula could be viewed as either necessary safeguards or as insufficient protection for low-income renters.