In this subtitle the following words have the meanings indicated. “Authority” has the meaning stated in § 12–101 of this article. “Fund” means the Housing Innovation Fund. “Housing innovation project” means a project to provide mixed–income, cross–subsidized housing, including educator workforce housing, that qualifies under § 4–3003 of this subtitle. “Program” means the Housing Innovation Pilot Program. “Public ownership” means that the authority of the political subdivision of the state in which or the county board of education in whose jurisdiction the project is located possesses majority ownership or control.

There is a Housing Innovation Pilot Program. The purposes of the Program are: to create opportunities for the State’s public housing authorities, county governments, municipal corporations, and county boards of education to increase the volume of housing production; and to reward counties, municipal corporations, and county boards of education pursuing innovative solutions to the problem of housing scarcity. The Program shall be operated with money in the Fund.

A project qualifies as a housing innovation project if it provides new housing in which: at least 20% of the units are set aside for households with a gross annual income of not more than 50% of the area median income for a household of like size; or at least 40% of the units are set aside for households with a gross annual income of not more than 60% of the area median income for a household of like size. The Department shall prioritize funding for projects that best meet the following guidelines: the project does not use low–income housing tax credit equity or tax–exempt volume cap; the affordable set–asides required under subsection (a) of this section remain restricted at elected levels for at least 99 years; the project remains in public ownership; the project includes a commitment to prevailing wage requirements; and any portion of the units are set aside for educator workforce housing.

The Department shall: coordinate with local housing authorities, county governments, municipal corporations, and county boards of education to ensure access to other financial resources, including senior debt products; develop new resources in support of statewide housing production; solicit applicants for the Program; and subject to subsection (b) of this section, select three projects to receive assistance from the Program each in a different jurisdiction. The Department may select fewer than three projects to fund if there is an insufficient number of eligible applicants.

In administering the Program, the Department shall take into consideration the need for increased development capacity within local housing authorities. The Department may not condition the award of funding from the Program on the issuance of bonds by the Department. For each of fiscal years 2026 through 2029, the Governor may include in the annual operating or capital budget bill an appropriation of $5,000,000 to the Fund. An appropriation under paragraph (1) of this subsection may be allocated using funding for rental housing projects administered in accordance with Subtitle 4 of this title.