Normally the May meeting of odd number years is one in which the Minnesota Housing Commissioner announces to the board the level and purpose of legislative appropriations awarded the Agency. Not this year, while the political process grinds forward, the board’s focus was on maintaining efforts and disaster response. As of the day of the board meeting, the Commissioner did not even know whether her staff would be working after June 30.
There was some good news, however; staff told the board that Agency revenues were picking up. This report on revenue was included in the semi-annual update on the Agency’s 2010-11 Affordable Housing Plan (AHP).** For July through December of 2010, the Agency more than doubled the expected return on its assets, earning $17 million for the six-month period.
In response to the review of the AHP report, board member Barb Sanderson asked how the Agency was targeting resources to those with greatest need, particularly racial minorities. Staff responded that there were several ways this was being done. First the Agency was marketing its loans in culturally specific ways to various ethnic groups. Also the Agency supports Indian housing programs directly. For the competitive multi-family programs, staff looks carefully at marketing plans for reaching disadvantaged people. In addition, the Agency supports the nonprofit HousingLink, which is developing a program to assist Twin Cities-area landlords in meeting fair housing requirements.
The board approved a program modification to help Minneapolis homeowners make emergency repairs due to recent tornado damage. Minneapolis was granted the flexibility to modify usage of $750,000 in Challenge Program funds it had received from Minnesota Housing for foreclosure remediation to help with north Minneapolis’ recovery. Match requirements were waived, and higher loan amounts were allowed. While this funding amount is relatively modest given the extent of the tornado damage, the Agency is limited in its response due to the timing of the disaster in its budget cycle. The Agency has a disaster relief fund, but by Minnesota law, its usage requires an area to be declared a federal disaster zone. The day after the tornado, the Agency attempted to get the legislature to waive that requirement, but time ran too short as the legislative session ended that same day.
With some new federal funds coming to the state, the Agency will play a role in response to another type of disaster, the economic one due to the recession. From HUD, Minnesota will receive counseling funding and $56 million in zero percent loans to be made to homeowners who have lost employment income and are facing foreclosure. The Agency’s role is to market the program and, with the Home Ownership Center, to administer counseling funds. Under this program, interest-free loans will provide assistance for up to 24 months to 1,400 to 2,000 Minnesota households. Loan repayment is forgiven by 20% over each of five years. Loans will be awarded by lottery, with each county receiving a designated number of loans. Some Minnesota counties will receive only one loan, and Hennepin County as the largest county will receive 260 loans. HUD will use a national loan originator for the program. The timing will be tight, with the program announcement to be made July 5 and loan commitments required by September 14. The task before the Agency will be to get out word about the program quickly, but not raise expectations too high, since the level of funding is very limited.
**Note: As Minnesota Housing develops its 2012-2013 Affordable Housing Plan, the Agency is convening a series of public meetings to discuss various focus areas for the AHP. Two meetings have been scheduled for June 8, including one on Neighborhood Revitalization Funding Needs to identify approaches and funding resource priorities for neighborhood revitalization and foreclosure recovery and one on Single Family Housing Needs to identify single family financing and funding needs for first mortgage products, entry cost assistance, rehabilitation financing, homeowner education and counseling, and other needs. A multi-family housing meeting is yet to be announced.
