ut-20260915-R982-502: R982-502. Low-income ADU Loan Guarantee Pilot Program

1. Agency Information

Title catchline: Workforce Services, Administration Building: Olene Walker Building Street address: 140 E 300 S City, state: Salt Lake City, UT Mailing address: PO Box 45244 City, state and zip: Salt Lake City, UT 84145-0244

2. Contact Persons

Name: Phone: Email: Amanda B. McPeck 801-526-9653a ampeck@utah.gov Please address questions regarding information on this notice to the persons listed above.

A. Rule or section catchline:

R982-502. Low-income ADU Loan Guarantee Pilot Program

B. Purpose of the new rule or reason for the change:

The Department of Workforce Services (Department) repeals Rule R982-502 because the Legislature repealed the authorizing statute creating the pilot program, Section 35A-8-504.5, effective 07/01/2026, in HB 68, passed in the 2026 General Session.

C. Summary of the new rule or change:

This rule is repealed in its entirety. 4. Legislative Action Information

B. If yes, any bill number and HB 68 (2026 General Session)

session: 5. Fiscal Information Provide an estimate and written explanation of the aggregate anticipated cost or savings to:

A. State budget:

The Department anticipates no fiscal impact from this repeal. Any fiscal impact was addressed in the fiscal note for HB 68 (2026). There are no outstanding pilot program costs.

B. Local governments:

The repeal is not expected to have any fiscal impact on local governments' revenues or expenditures because this rule does not apply to local governments.

C. Small businesses ("small business" means a business employing 1-49 persons):

The Department anticipates no fiscal impact on small businesses from this repeal. Any fiscal impact was addressed in the fiscal note for HB 68 (2026). There are no outstanding loan guarantees from this pilot program. 114 UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 NOTICES OF PROPOSED RULES

D. Non-small businesses ("non-small business" means a business employing 50 or more persons):

The Department anticipates no fiscal impact on non-small businesses from this repeal. Any fiscal impact was addressed in the fiscal note for HB 68 (2026). There are no outstanding loan guarantees from this pilot program. E. Persons other than small businesses, non-small businesses, state, or local government entities ("person" means any individual, partnership, corporation, association, governmental entity, or public or private organization of any character other than an agency): The Department anticipates no fiscal impact on other persons from this repeal. Any fiscal impact was addressed in the fiscal note for HB 68 (2026). There are no outstanding loan guarantees from this pilot program.

F. Compliance costs for affected persons:

The Department identifies no compliance costs associated with the repeal of this rule. This rule imposed no compliance costs on affected persons; therefore, this repeal results in no change in compliance obligations. 6. Regulatory Impact Summary Table Enter the cost or savings in the relevant cell. If there is no cost or savings, enter, "$0." If a cost or savings is inestimable, enter, "inestimable." Fiscal Cost FY2027 FY2028 FY2029 FY2030 FY2031 State Budget $0 $0 $0 $0 $0 Local Governments $0 $0 $0 $0 $0 Small Businesses $0 $0 $0 $0 $0 Non-Small Businesses $0 $0 $0 $0 $0 Other Persons $0 $0 $0 $0 $0 Total Fiscal Cost $0 $0 $0 $0 $0 Fiscal Benefits FY2027 FY2028 FY2029 FY2030 FY2031 State Budget $0 $0 $0 $0 $0 Local Governments $0 $0 $0 $0 $0 Small Businesses $0 $0 $0 $0 $0 Non-Small Businesses $0 $0 $0 $0 $0 Other Persons $0 $0 $0 $0 $0 Total Fiscal Benefits $0 $0 $0 $0 $0 Net Fiscal Benefits $0 $0 $0 $0 $0 7. Regulatory Impact Analysis Approval The Commissioner of the Department of Workforce Services, Casey R. Cameron, has reviewed and approved this regulatory impact analysis. 8. Family Impact Information

A. The agency has considered this rule's impact on family health, stability, and fo☒mation:

UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 115 NOTICES OF PROPOSED RULES

B. Summary of reasonable alternatives or modifications:

There is no negative impact on family health, stability, or formation not contemplated for in HB 68 (2026) which repealed this program. 9. Citation Information Provide citations to the statutory authority for the rule. If there is also a federal requirement for the rule, provide a citation to that requirement: Section 35A-8-504.5 11. Public Notice Information The public may submit written or oral comments to the agency identified in box 1.

A. Comments will be accepted until: 10/15/2026

12. Effective Date Information This rule change MAY become effective on: 10/22/2026 (NOTE: This is the date the agency anticipates making the filing effective. It is NOT the effective date) 13. Agency Authorization Information Agency head or Casey R Cameron, Commissioner Date: 08/25/2026 designee and title: R982. Workforce Services,Administration. [R982-502. Low-incomeADU Loan Guarantee Pilot Program. R982-502-1. Purpose. The purpose of this rule is to establish standards and procedures for administering the two-year pilot program to provide loan guarantees on behalf of borrowers to ensure the repayment of low-income ADU loans, and to encourage lenders to provide capital to homeowners to facilitate the construction of accessory dwelling units to rent to low-income renters, to expand the availability of low-income housing in the state. R982-502-2. Authority. The legal authority for this rule is found in Section 35A-8-504.5. R982-502-3. Definitions. (1) Terms used in this rule are defined in Section 35A-8-504.5. (2) In addition: (a) "Division" means the Housing and Community Development Division. (b) "Executive director" means the executive director of the Department of Workforce Services or the executive director's designee. R982-502-4. Minimum Criteria. (1) The executive director may not provide a loan guarantee for a low-income ADU loan under the pilot program unless the criteria set forth in this Section R982-502-4 are satisfied. (2) The lender: (a) must be a: (i) trust company; (ii) savings bank; (iii) savings and loan association; (iv) bank; (v) credit union; or (vi) any other entity that provides low-incomeADU loans directly to borrowers; (b) shall agree in writing, in a form determined by the Division, to participate in the pilot program; and (c) shall make available to prospective borrowers the option of receiving a low-incomeADU loan that: (i) has a term of 15 years; and (ii) charges interest at a fixed rate; (d) shall determine whether to make a loan to an eligible borrower, including credit risk evaluations, based on generally accepted lending practices; and (e) shall assist the loan applicant in the preparation of the loan application and supporting documentation and in the determination of the financial feasibility of the loan. 116 UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 NOTICES OF PROPOSED RULES (3) The borrower: (a) must be a residential property owner; (b) shall agree in writing, in a form determined by the Division, to participate in the pilot program; and (c) shall satisfy the credit evaluation criteria of the lender. R982-502-5. Lender Responsibilities. (1) After making a low-income ADU loan, the lender shall monitor the activities of the borrower on a yearly basis during the term of the loan to ensure the borrower: (a) agrees in writing to participate in the pilot program; (b) constructs an accessory dwelling unit on the borrower's residential property within one year after the day on which the borrower receives the loan; (c) complies with Section R982-502-6; and (d) complies with any other term or condition of the loan. (2) The lender shall promptly notify the executive director in writing if the borrower fails to comply with any requirement in Subsection R982-502-5(1). (3) The lender shall perform all necessary and standard loan servicing activities for each loan secured by a low-income ADU loan guarantee. R982-502-6. Borrower Responsibilities. After receipt of a low-incomeADU loan, the borrower shall: (1) construct an accessory dwelling unit on the borrower's residential property within one year after the day on which the borrower receives the loan; (2) occupy the primary residence with which the accessory dwelling unit is associated: (a) after the accessory dwelling unit is completed; and (b) for the remainder of the term of the loan; and (3) rent the accessory dwelling unit to a low-income individual: (a) after the accessory dwelling unit is completed; and (b) for the remainder of the term of the loan. (4) If, during the term of the loan, the borrower sells or otherwise conveys or transfers the property with which the accessory dwelling unit is associated, the loan guarantee shall be extinguished at the time of the sale. If the purchaser assumes the loan at the time of sale, the purchaser shall be required to apply for and receive a new loan guarantee under this pilot program. R982-502-7. Loan Terms. Unless otherwise mutually agreed upon by the lender and borrower, the low-incomeADU loan must: (1) have a term of 15 years; and (2) charge interest at a fixed rate. R982-502-8. Request for Proposals. (1) The Division shall award the administration of the pilot program based on a competitive application process. The Division will publicly issue a request for proposals. (2) Each application will be reviewed and scored by a committee established by the Division. (3) Scoring priorities for the award may be established by the Division and, if established, will be included in the request for proposals. R982-502-9. Loan Loss Reserve Fund. (1) There is created a $500,000 loan loss reserve fund to be used to secure the loan guarantees issued by the Division. The total amount of the Division's loan guarantees under this pilot program may not exceed $500,000. (2) Division loan guarantees shall not exceed the: (a) lesser of 75% of the loan amount or $50,000 per basement low-incomeADU loan; (b) lesser of 50% of the loan amount or $50,000 per garage low-incomeADU loan; or (c) lesser of 25% of the loan amount or $50,000 per detached low-incomeADU loan. R982-502-10. Terms of Guarantee. (1) The term of the loan guarantee will be the shorter of the loan term or 15 years. (2) The following restrictions apply for each loan guarantee issued by the Division: (a) the borrower's property shall carry a recorded deed restriction requiring the accessory dwelling unit to be rented to persons whose annual income does not exceed 80% of the area median income as determined by the U.S. Department of Housing and Urban Development; (b) if the loan is not prepaid or paid in full before the end of the loan term, the term of the deed of restriction shall be 15 years, measured from the issuance of the certificate of occupancy for theADU; (c) if the loan is prepaid or paid in full before the end of the loan terms, the term of the deed of restriction shall be 5 years, measured from the issuance of the certificate of occupancy for theADU; and (d) the lien position for the low-incomeADU loan shall be limited to first, second, or third position. UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 117 NOTICES OF PROPOSED RULES R982-502-11. Events of Default. (1) In addition to any event of default defined in the contract between lender and borrower, any violation by the borrower of any part of Section R982-502-6 shall be considered a default. (2) After a loan is in default for a period of 90 days, the lender shall, within 10 days, notify the Division of the default and recommend a course of action. (3) Upon collection of the amount guaranteed, any excess funds collected shall be applied first to principal and then to interest and be paid to the lender. R982-502-12. Eligible Costs. Reasonable and customary fees for loan origination shall be negotiated between borrowers and lenders. KEY: Single family housing modifications, accessory dwelling units Date of Last Change: February 22, 2022 Authorizing, and Implemented or Interpreted Law: 35A-8-504.5] End of the Notices of Proposed Rules Section 118 UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 NOTICES OF CHANGES IN PROPOSED RULES After an agency has published ROPOSED RULE in the Utah State Bulletin, it may receive comment that requires the PROPOSED RULE to be altered before it goes into effHANGE INP ROPOSED RULE allows an agency to respond to comments it receives. As with a POPOSED R ULE, a HANGE IN PROPOSED R ULEis preceded by a ULE ANALYSIS. This analysis provides summary information about the CNGE INPROPOSED RULE including the name of a contact person, anticipated cost impact of the rule, and legal cross-references. While the law does not designate a comment period for a C IN PROPOSED R ULE, it does provide for a 30-day waiting period. An agency may accept additional comments during this period and, at its option, may designate a comment period or may hold a public hearing. The 30-day waiting period for CP ROPOSED RULES published in this issue of the Utah State Bulletin ends October 15, 2026. Following the RE ANALYSIS, the text of HANGE INP ROPOSED RULE is usually printed. The text shows only those changes made since the PROPOSED RULE was published in an earlier edition of the Utah State Bulletin. Additions made to the rule appear underlined (example).Deletions made to the rule appear struck out with brackets surrounding them ([example]). A row of dots in the text between paragraphs (. . . . . . .) indicates that unaffected text, either whole sections or subsections, was removed to conserve spaceHANGE INPROPOSED R ULEis too long to print, the Office ofAdministrative Rules may include only the RSI. A copy of rules that are too long to print is available from the agency or from the Office of Administrative Rules. From the end of the 30-day waiting period through January 13, 2027, an agency may notify the Office ofAdministrative Rules that it wants to make HANGE INPROPOSED R ULEeffective. When an agency submits OTICE OE FFECTIVE DATE for a HANGE INPROPOSED R ULE, theROPOSED R ULEas amended by the CHANGE INPROPOSED R ULEbecomes the effective rule. The agency sets the effective date. The date may be no fewer than 30 days nor more than 120 days after the publication date of the CNP ROPOSED RULE. If the agency designates a public comment period, the effective date may be no fewer than seven calendar days after the close of the public comment period nor more than 120 days after the publication date. Alternatively, the agency may file another COPOSED R ULE in response to additional comments received. If the Office of Administrative Rules does not receive a NF EFFECTIVED ATEor another HANGE INPROPOSED R ULEby the end of the 120-day period after publicatiHANGEhe C INPROPOSED RULE filing, along with its assocROPOSED R ULE, lapses. CHANGES IN PROPOSED RULES are governed by Section 63G-3-303, Rule R15-2, and Sections R15-4-3, R15-4-4, R15-4-5b, R15-4-7, R15-4-9, and R15-4-10. The Changes in Proposed Rules Begin on the Following Page UTAH STATE BULLETIN, September 15, 2026, Vol. 2026, No. 18 119 NOTICES OF CHANGES IN PROPOSED RULES NOTICE OF SUBSTANTIVE CHANGE TYPE OF FILING: CPR (Change in Proposed Rule) Filing ID: 58044