The December 2014 meeting of the board of Minnesota Housing in the midst of the holiday season was brief. The board discussed staffing updates and the governor’s budget, as well as reports on bond sales in 2014 and the Agency's annual risk profile.
Staffing and budget updates
The Commissioner told the board that she was moving ahead in filling the three vacant assistant commissioner positions. Long-term Agency employee, Kasey Kier, started the week of the meeting in her new role in leading the Agency’s homeownership programs. For the Agency’s rental programs, Wes Butler will start January 5. Wes held a similar position for the City of Minneapolis. For the last of the hires, the assistant commissioner for policy, Tingerthal said that she expected to commit the position to a candidate by the end of December.
Tingerthal told the board that much of her time recently had been spent in preparing materials for the FY 2016-17 budget. She added that the governor will face tough choices in winnowing the requests of state agencies for new resources; the new requests stand at three times the amount of Minnesota's current budget surplus. On January 27, the governor will be announcing his budget proposal to the Legislature, which determines final agency budgets during the 2015 session.
Bond sales and annual risk profile report
The board heard a report on Agency bond sales. In 2014 bond sales included $436 million in single-family bonds and another $60 million for multi-family housing. These totals put the Agency among the top state housing agencies in terms of volume of financing. Tingerthal said that bonds were now being sold at extremely low interest rates, in large part due to international turmoil and continuing Federal Reserve efforts to keep long term rates low. With Agency bond interest rates at about 3% (and mortgage rates starting at 3.25%), this is an excellent time to buy a home, she said.*
The Agency also received its annual report on its risk profile. Essentially, the Agency retains a very low risk profile, with most risk, such as the volatility of interest rates, outside of Agency control. One internal risk concern was the significant turnover of long-tenured leadership employees.
*MHP note: Here's how Agency bond sales and mortgages are related, in simplified form: the Agency sells bonds to investors (ie. on Wall Street), and then uses the money received from the bond sales to purchase mortgages. The mortgages carry a slightly higher rate than the Agency must pay on the bonds, which is how the Agency generates revenue.