In her introductory remarks at Minnesota Housing's January Board Meeting Commissioner Tingerthal informed the board that the Agency won big in this year’s Better Government Award. Governor Dayton recognized Minnesota Housing for programs to increase homeownership among households of color and for the work of the Interagency Council on Homelessness. Regarding the Council, Tingerthal said that earlier this day the new two-year action plan to prevent and end homelessness was adopted. This plan committed the agency to fund 5,000 units of housing, a stretch goal added Tingerthal, and one that will require the support of many partners.
(In a footnote to the Commissioner’s report it was announced that the 2016 Super-RFP funding selections would be made on October 19.)
To enable the Metropolitan Council to provide a grant to the Land Bank Twin Cities, the agency informed the board it would be accepting a $1 million grant from the Council and re-granting it to the Land Bank. The Council does not have statutory authorization to make grants to private agencies so they needed Minnesota Housing to serve as an intermediary. The Agency staff’s report noted that the Land Bank has used $7.2 million for 12 large-site acquisitions and $105.8 million to purchase 1,200 properties following foreclosure.
Changes in loan programs
The board modified the terms of the homeownership Deferred Payment Loan and the Monthly Payment Loan programs. The restructuring, including a lower maximum loan amount for deferred loans and higher amounts for the interest-bearing monthly payment loans had to be done to help stretch program resource for the entire year. Because of the increased loan volume there was more demand for these programs. Staff told the board that borrowers for nearly 90% of the agency acquired mortgage loans received funding from one of the programs. The Agency also will draw down one half of its 2016 program contingency reserve ($1 million drawn from “Pool 3”) to increase resources available through the deferred loan program, and add $4 million from its “Pool 2” resources for the low interest monthly payment loans. Board member Garnett asked about the impact on program demand due to the increasing costs to acquire homes in the Twin Cities. Staff responded that they had met with lenders in December and concluded that the new maximum loan amount would be sufficient to meet the needs of borrowers and that a moderate increase in housing prices was considered when determining loan limits.
Senior housing pilot program
John Patterson presented staff’s concept for a senior housing pilot program the Agency would be offering in the 2016-17 program year. Just one project would be funded under the pilot. Patterson said because a large number of seniors have very little income the pilot would encourage inclusion of as many 30 percent AMI affordable units as possible. Staff reported that about 40 percent of all senior renters have incomes under 30 percent AMI (currently 40,000 households – a number expected to double in the next 25 years). The Agency, however, would also look for development approaches like use of 4 percent tax credits that would reduce the level of needed gap funding. The applicants for pilot funding would need to show a services component in their projects. Paterson said that staff are predicting a large need for senior rental housing but that it still would be several years before the big wave hits; in the interim the Agency would continue its efforts to fund improvements that help seniors stay in their homes. Board member Joe Johnson asked how long would it take for the Agency to learn something from the pilot; Patterson responded that it would be two years from the time of construction.
Homes for All bonding ask
During the discussion of the senior housing pilot Commissioner Tingerthal mentioned that the Homes for All coalition would seek a higher Housing Infrastructure Bond amount than that proposed by the governor and that the difference would fund housing for low income seniors. The alliance and Minnesota NAHRO had discussed with the Agency the need to advocate for Housing Infrastructure Bonds for senior housing in a way that would not take away funding from other HIB permitted uses. Tingerthal said that the Agency’s pilot and the Homes for All request are aligned but not necessarily associated.
The pilot parameters will be publicized in February to give potential applicants time to complete proposals under the 2016 Consolidated RFP.
Agency’s 2016 divisional work plans
Deputy Commissioner Barb Sporlein updated the board on the Agency’s 2016 divisional workplans. She pointed out progress being made in several initiatives the Agency was undertaking in the year. First was the previously discussed pilot for senior housing. Also the Agency would focus research on expanding homeownership among households of color, answering the questions such as what are the needs and what is working. Other priorities Sporlein highlighted included expanding multifamily first mortgage lending, the interagency initiatives (e.g., the Olmstead cabinet and the Interagency Council on Homelessness), implementing the agency’s role as the lead agency for the homeless management information system (HMIS), and supporting increased capacity among the Agency’s local program partners.