While home ownership in Utah continues to be costly and increasingly unattainable, a new loan program could help create more for-sale condominiums in the Beehive State. 

In a meeting last Thursday, the Utah Housing Corporation’s board of trustees unanimously approved a resolution that created the Condominium Construction Loan Program, which will provide loans to developers for building condos. The program’s stated goal is to create more affordable home ownership opportunities throughout the state. 

The new loan program is an extension of the Utah Homes Investment Program (UHIP), which was created as part of House Bill 572 that passed during the 2024 Utah Legislative Session, according to a memo from the UHC board meeting. The bill set aside $300 million from the state’s Transportation Infrastructure General Fund Support Subfund for the program. 

Initially the program called for the Office of the State Treasurer to dole out the money to financial institutions so they could provide low-interest loans to developers for, “building single-family homes attainable by owner-occupant first-time homebuyers,” the memo says. 

However, that program was modified earlier this year with House Bill 360, “due to limited utilization of the UHIP program in its first year,” the memo says. 

David Damschen, president and CEO of the Utah Housing Corporation, said during the Thursday meeting that the initial program didn’t seem to be, “sufficient for enough financial institutions to offset the perceived risk seen by those financial institutions doing single family home construction lending.” 

But prior to the 2025 Utah Legislative Session, Damschen said Steve Waldrip, senior advisor for housing strategy for Utah Gov. Spencer Cox, asked if those funds could go to UHC instead. As a result, HB 360 designated UHC as a “qualified depository,” meaning the state housing corp could dispense those funds to finance construction projects.

“For each approved, qualified project under the (condo construction loan program), UHC will request funds from the (Utah State) Treasurer in an amount up to 100% of project costs, and lend the low-cost proceeds (including a spread) to the project’s developer,” the memo says. “The loan will be repaid to UHC from the proceeds of condominium home sales and UHC will in turn repay the Treasurer with those proceeds.” 

The loan program approved by UHC carries a number of requirements for projects. To be eligible for the loan, the individual condo units must be owner-occupied with an owner-occupancy deed restriction for at least five years. The loan program also creates an equity sharing program between UHC and the people who are first to buy the condo units. 

“The equity sharing agreement allows the homeowner to earn up to 75% of equity appreciation (15% per full year of occupancy, through five years), with UHC capturing the balance of the equity upon sale of the unit,” the memo says. “The UHC portion of equity will support a program loss reserve fund and/or additional affordable housing programs.”

One of the current hangups in policy, Damschen said Thursday, is the $300 million from HB 572 is only available until June 2028, though he added, “I believe Mr. Waldrip is interested in working with legislative leadership and the Governor’s team on finding other more durable or longer available funds so we can get more out of this.” 

He added that another aspect that’s not included in the loan program was construction defect liability insurance, which can be a common hangup when developing condo buildings. 

“There was an intent to have an insurance subsidy to address the construction defect liability insurance, (but) that element is not in place,” Damschen said. “We do have a $1 million appropriation that we think is potentially available for that element, but that’s a little bit up in the air. It’s not something that we would control.” 

Damschen also noted this program could take advantage of a recently announced state program that would allow surplus land owned by the Utah Department of Transportation to be sold off at below-market rates. 

In order to prioritize developments, applications will be scored using a number of criteria, including a unit’s affordability, design characteristics, location and market demand, among other criteria in the loan program guidelines. 

The loan program is part of Gov. Cox’s push to create 35,000 new starter homes by 2030, an idea first disclosed to Building Salt Lake a year before Cox announced the goal. 
Email Jacob Scholl