1. (1) Definitions. As used in this section, unless the context otherwise requires:

   1. (a) Community investment means an investment that is intended to generate positive, measurable impact for Colorado schoolchildren, families, or communities while simultaneously generating financial returns. Community investments may have below-market rates of return.
   2. (b) Fund means the public school fund of the state created in section 3 of article IX of the state constitution.
   3. (c) Portfolio means the community investment portfolio created in this section.
   4. (d) Program means the educator first home ownership program created in this section.
   5. (e) Program manager means the Colorado housing and finance authority; except that, if the Colorado housing and finance authority elects at any time not to serve as program manager, the public school fund investment board shall select a replacement entity that agrees to serve as program manager.
   6. (f) Public school employee means any employee of a Colorado school district, charter school, institute charter school, board of cooperative educational services, or innovation zone.
   7. (g) Shared equity down payment assistance program means a program through which a borrower receives financial assistance for a down payment on a property in accordance with subsection (4) of this section.
2. (2) Portfolio created. The community investment portfolio is created within the fund. By July 1, 2032, the treasurer shall invest at least twenty percent of the fund's value into the portfolio.

3. (3) Allowable portfolio investments. Money in the portfolio must be invested in community investments. Allowable community investments include, but are not limited to:

   1. (a) Bonds issued by Colorado school districts and charter schools;
   2. (b) Certificates of participation issued by Colorado school districts and charter schools;
   3. (c) Mortgage pass-through securities and collateralized mortgage obligations secured by residential real estate, the majority of which is owned by public school employees;
   4. (d) Loans to the Colorado middle income housing authority for a revolving loan fund that funds rental housing developments that include preferences for public school employees;
   5. (e) Bonds issued by the middle income housing authority that fund rental housing developments that include preferences for public school employees;
   6. (f) Bonds or mortgage-backed securities issued by the Colorado housing and finance authority that fund housing developments that include preferences for public school employees or mortgages secured by residential real estate, the majority of which is owned by public school employees;
   7. (g) Mortgage revenue bonds that support public school employee mortgages with interest rates of three percent or less;

   8. (h) Loans to community development financial institutions or nonprofits with a history of providing affordable homeownership financing that fund:

      1. (I) Housing that includes preferences for public school employees; or
      2. (II) Low-interest mortgages secured by residential real estate that is owned by public school employees;
   9. (i) Down payment shared appreciation products secured by residential real estate that is owned by public school employees; and
   10. (j) Other investments that support the public purpose of the community investment portfolio.

4. (4) Educator first home ownership program. (a) The educator first home ownership program is created within the portfolio. In order to support public school employee home ownership, address educator shortages, and support the retention of public school employees, the treasurer shall invest the following amounts into the program, except that the total investment amount shall never exceed the sum of the investments made in accordance with subsection (4)(c) of this section plus the total amount of shared equity down payment assistance that has been provided through the shared equity down payment assistance program, by the following dates:

   1. (I) By July 1, 2028, the greater of six percent of the fund's value or one hundred million dollars;
   2. (II) By July 1, 2030, the greater of twelve percent of the fund's value or two hundred million dollars.

   3. (b) The treasurer shall aim to invest a target of seventy-five percent of the money in the program into a shared equity down payment assistance program for public school employees to be managed by the program manager. The shared equity down payment assistance program must be established by July 1, 2026. Once the shared equity down payment assistance program is established:

      1. (I) The public school fund investment board shall purchase from the program manager the mortgage products created through the shared equity down payment assistance program in tranches of reasonable amounts that are mutually agreed upon by the public school fund investment board and the program manager; and
      2. (II) The public school fund investment board may provide notice of any discontinuation of future investments that the program manager has not already committed to the shared equity down payment assistance program, which notice must be provided at least six months prior to discontinuation.
   4. (c) The treasurer shall aim to invest a target of twenty-five percent of the money in the program into allowable community investments described in subsection (3) of this section with the purpose of increasing the supply of houses for sale and access to home ownership in rural and other underserved communities.

   5. (d) The program manager shall establish underwriting criteria for the shared equity down payment assistance program and shall establish guidelines so that the shared down payment equity assistance program:

      1. (I) Prioritizes first-time home buyers that use the home as a primary residence;
      2. (II) Provides shared equity down payment assistance to public school employees and aims to help as many public school employees as possible achieve affordable home ownership;

      3. (III) Allows appreciation-sharing between the shared equity down payment assistance program and the borrower, with:

         1. (A) The shared equity down payment assistance program's proportional share of appreciation in a property never exceeding the percentage of the total purchase price that the shared equity down payment assistance program's financial assistance represented, as further described in program guidelines; and
         2. (B) Any profit or loss realized in the share of appreciation described in subsection (4)(d)(III)(A) of this section being borne by the shared equity down payment assistance program rather than the borrower or the program manager.
      4. (IV) If the program manager is the Colorado housing and finance authority, is paired with a first mortgage loan provided through the program manager's participating lender network that bears an interest rate that is at or below the prevailing mortgage rates.

   6. (e) Unless investments in the shared equity down payment assistance program have been discontinued and there is no fund money invested in the shared equity down payment assistance program, the program manager shall annually publish and present a report to the public school fund investment board on shared equity down payment assistance program outcomes, including:

      1. (I) The number of shared equity down payment assistance program borrowers;
      2. (II) The geographic distribution of shared equity down payment assistance program borrowers;
      3. (III) The area median income of shared equity down payment assistance program borrowers;
      4. (IV) The median purchase price, median loan amount, and average interest rate on first mortgages for public school employees who benefit from the shared equity down payment assistance program;
      5. (V) The amount of money provided in down payment assistance by the shared equity down payment assistance program;
      6. (VI) The amount of principal repaid and money received as shared appreciation by the shared equity down payment assistance program; and
      7. (VII) The amount of loss, if any, experienced by the shared equity down payment assistance program.
   7. (f) The program manager shall present the first annual report required by subsection (4)(e) of this section no later than December 1, 2027. Each annual report must be published on the program manager's website and distributed to: The house of representatives education committee and the senate education committee, or their successor committees; the public school fund investment board; and the Colorado department of education.
   8. (g) Nothing in this section prevents the use of other sources of state or local funding to be leveraged with the program.

Source: L. 2025: Entire section added, (SB 25-167), ch. 449, p. 2578, § 4, effective June 4.