For the May meeting, Commissioner Tingerthal credited Agency legislative staff and advocates for a successful year at the capitol. She also gave an update on the status of federal funding for the coming year. The board approved a bond sale for the first project to benefit from funding from the Housing Infrastructure Bonds passed by the Minnesota Legislature in 2012. And lastly, the board and staff talked through several changes in homeownership programs.
Tingerthal Highlights 2013 Legislative Gains
In her opening remarks Commissioner Mary Tingerthal gave an overview of the recently completed legislative session, in which the Agency's base budget was increased by $22 million. Tingerthal gave a lot of credit for the success to Tonja Orr and Katie Topinka, the Agency's legislative liaison team, which Tingerthal said was the best in state government.
In addition to the funding awarded by the legislature, Tingerthal and Orr identified other gains. There was an amendment to the housing infrastructure statute that makes it clear that private activity bonds can be used for this purpose (more on this below). The extension to the sunset for the state's historic tax credit, said Orr, was "an enormous boon for affordable housing." Chair Ken Johnson applauded staff for the amazing results. Orr responded that the Agency was bound to the governor's budget, but the housing and homeless advocates were able to push for more. Commissioner Tingerthal said that just two years ago the advocates set to coalesce in the wake of a lost opportunity for funding. Many predicted the demise of the advocates' coalition but now we are seeing the fruits of that coalition effort, she added.
Commissioner Tingerthal said that the legislature also provided important flexibility in setting salaries for commissioners and state staff. It had been 14 years since salary levels for top employees had increased. Salaries can now go to 133 percent of the governor's salary.
To promote the legislative success of the governor's housing and jobs initiative, Commissioner Tingerthal said that she would be in Roseau May 29 to announce the newly funded workforce housing program.
Federal Policy Update
Somewhat offsetting the good news at the legislature, Commissioner Tingerthal mentioned that the budget allocation the U.S. House made to the housing and transportation committee was 14 percent below what Congress last committed to that committee. This will likely lead to another sizable cut to the HOME program Tingerthal surmised.
For its contract work with HUD in overseeing Section 8 properties, Commissioner Tingerthal announced that the Agency would be receiving a $395,000 bonus; this was the maximum performance incentive achievable under HUD's Performance Based Contract Administration agreement.
Housing Infrastructure Bonds Approved in 2012 Awarded to First Project
The Agency board approved the issuance of $4.5 million in housing infrastructure bonds for renovation and preservation of a project-based Section 8 property in Rochester. $30 million in housing infrastructure bonding authority was awarded to the Agency by the legislature in 2012. The allowed uses of such bonds are for supportive housing, preservation of federally assisted housing, and foreclosure recovery.
The board also passed a resolution clarifying that the Challenge and Housing Trust Fund programs will provide the framework for the use of housing infrastructure bonds. Staff identified program policies would not apply to infrastructure bonds. For instance, infrastructure bond proceeds will be structured as forgivable loans, whereas Challenge and Housing Trust Fund loans are structured as deferred loans. With another variance, use restrictions will be extended for the term of the infrastructure bond (20 years) as opposed to 15 years under the Challenge and trust fund programs. Finally, the infrastructure bond amount will not be added to the Challenge program funding when determining whether the requirement has been met that 50% of Challenge funds be used in projects that include non-state funding.
Homeownership Counseling and Award-Making
Several items before the board concerned home ownership. First, June is national home ownership month, and the Agency will be promoting the Home Ownership Center's new on-line homebuyer counseling program. Also related to counseling, the Agency is passing through to counseling agencies a seventh round of federal foreclosure counseling funds; $981,000 will be used to serve 3,000 additional households by the end of the calendar year. For homeowners facing foreclosure, the US Treasury granted Minnesota Housing $187,000 for counseling under the Making Home Affordable initiative. This amount will help 315 households who are expected to seek options to foreclosure before the December 31, 2013 deadline.
The board approved staff's proposal for scoring applications under the new Community Homeownership Impact Fund (formerly named the CRV program). Board member Bostrom did question whether this scoring plan should be adopted without community review. John Patterson said that the point system was structured so that projects which best met the Agency's strategic priorities would be funded. Board member Klinzing asked the impact on Indian tribes. Mike Haley said that funds were set aside for tribes.