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The pre-holidays December board meeting for Minnesota Housing covered changes in single family loans for better a fit with emerging markets, and extension of a program to rehab rental housing in Greater Minnesota. A report on the Agency's annual risk assessment was also made, and Commissioner Tingerthal announced the state's new Plan to End Homelessness.

Plan to End Homelessness and New Chief Financial Officer

Commissioner Mary Tingerthal opened the meeting with an announcement that later in the day there would be a press conference introducing the state's new Plan to End Homelessness. Tingerthal noted that the plan reinforces the call for $100 million in bonding for affordable housing. She said that participating state commissioners would convene in June to develop 2015 budget proposals that also would advance that the Plan.

In addition, Tingerthal announced that the Agency's chief financial officer, Don Wyszynski, will be retiring early in 2014. The position will be filled by Rob Tietz, who has been with the Iowa Housing Finance Agency.

Income Calculations for Single Family Loans Adapted to Better Support Emerging Markets

The board supported staff's request to adjust income calculation procedures for Agency single family loan programs. The previous income determination methods have been seen as an impediment to achieving the Agency's emerging markets goals due to the way that incomes of multigenerational households and households with temporary members (such as family members who have newly arrived in the country) have been calculated. With the board's action, the incomes of non-spousal household members will no longer be included in calculated household incomes to determine eligibility, unless those members would be a party to the loan note. This action also aligns program income calculations with the tax code guidelines.

Greater Minnesota Rental Rehab Program Extended

The board approved a time and funding extension for the Rental Rehab Deferred Loan (RRDL) pilot program. Through RRDL, the Agency provides 0% deferred loans for rehabilitation of small Greater Minnesota rental properties. Funds are provided by the Agency either through program administrators or directly to property owners. The program pilot, launched in early 2012, became much more popular in April 2013 when the Agency introduced a simplified application and underwriting process.

Susan Haugen, RRDL program administrator, said that the Agency prioritizes applications for communities experiencing job growth. At this time all program funds have been committed. The board extended the program through September 2015 and added $6.3 million for new loans. Funding for the program comes out of state appropriations.

Staff added that that the new RRDL end date gives the Agency time to review the program and to bring forward recommendations to make the program permanent as part of the 2016-17 Affordable Housing Plan. Board member John DeCramer asked about the large areas of Greater Minnesota not served by the program administrators. Staff responded that it was not the intent that there be new administrators for the pilot, but that project-level applications could come from throughout Greater Minnesota without relying on program administrators. Some of the new funds would be reserved for project applications.

Annual Risk Assessment

The final presentation concerned the Agency's annual risk assessment, which considers risks seen as impacting the Agency's ability to carry out its strategic or affordable housing plans. Looking at "heat maps" identifying areas of greatest risk to the Agency, Chief Risk Officer Will Thompson stated that most areas within the Agency's control showed low risks. "Warm" higher risk areas included the bond market and interest rates, which are not considered controllable. No risks were deemed to be very high, however. The one area that moved from moderate to high risk this year was the category "Federal Resources."