Commissioner Tingerthal said that this time of the year was a favorite one for the Agency; it is during the application and closing period when agency staff get "up close and personal" with developers and their projects. Funds were approved for addressing homelessness, and the board discussed several mortgage programs issues in light of current markets.
Project Awards under Review, Moving Forward
Project proposals approved last fall are moving to closing and the start of construction. At the same time, this year's rental applications were due in June, and the home-ownership ones July 11. The board was asked to set aside November 7 for a special meeting to review and approve the 2013 applications.
Funds Approved for Addressing Homelessness
The board approved investments to address homelessness under two of the Agency's programs. First, 20 grants were approved under the Family Homeless Assistance and Prevention Program (FHPAP). With these awards, including a grant enabling Heartland Community Action to serve an additional five counties, for the first time in the program's twenty year history FHPAP will have statewide coverage. The largest grant, of $4 million, was awarded to Hennepin County. Funds were distributed so that 55% of resources will go to Twin Cities programs and the remaining 45% to Greater Minnesota. This division is based on a review of relative renter cost burden, poverty, and unemployment.
The second homelessness program for which grants were awarded is the Operating Subsidy program. $2.9 million will pay operating costs for 34 supportive housing developments over two years. Funds are earmarked for expenses such as tenant service staffing or simply to cover revenue shortfalls. $950,000 of the granted funds come from the Department of Human Services (DHS) through an interagency agreement to support individuals experiencing severe mental illness. Minnesota Housing characterizes the Operating Subsidy as a "last resort" resource, and requires grantees to seek outside funding to minimize draws upon the program. However, this requirement has not led to any substantial reduction in the Agency's funding obligation. Projects serving formerly homeless youth were asked to apply for funds under the newly appropriated Homelessness Youth Act.
Home ownership came up as a topic in several ways. First Commissioner Tingerthal said that the rapid increase in home mortgage interest rates was resulting in a significant number of new mortgage applications for Agency funds.
She also mentioned that the credit markets have been extremely conservative following the 2008 financial crisis. Practices regarding buy-backs of mortgages sold to Fannie Mae and Freddie Mac have made it difficult for anyone with a credit score under 700 or buying a home in a depressed area to obtain a mortgage.
The Board agreed to a staff recommendation that the maximum home ownership deferred payment loans be increased from $3,000 to $4,500, or 5% of a home's purchase price, whichever is less. Tingerthal said that as a result of rising credit and down payment requirements, the Agency may find it difficult to meet its minority lending goal without this program modification.
Other updates: Roseau, Interagency Council on Homelessness, Admin Budget
Tingerthal gave an update on the meeting held in May in Roseau to announce the outcome of the legislative session. She said passage of the new workforce housing program was very well received, but the most memorable part of the trip was an unfortunate run-in with a deer. Warren Hanson of Greater Minnesota Housing Fund, along for the ride, digitally captured the moment. Tingerthal said the picture had been submitted to Minnesota Housing staff for an appropriate caption.
Progress continues with the newly reconstituted Minnesota Interagency Council on Homelessness. Tingerthal said that she and DHS commissioner Lucinda Jessen will serve as co-chairs, and Tina Smith, Governor Dayton's chief of staff, will serve as the governor's representative. The first meeting is scheduled for August 9.
John Patterson, Director of Planning, Research, and Evaluation, announced the Agency's two summer intern projects. One intern will assess the cost drivers for rental housing projects while another will analyze the impact of the Agency's foreclosure recovery investments.
Finally, Deputy Commissioner Barb Sporlein presented the Agency's 2014 administrative budget. The Agency will be adding 3.4 new positions and will see a 4.6% operating budget increase compared to the current year. Overall, the Agency's administrative costs run about 3.5% of estimated program assistance, a level that has remained consistent over the last several years.