The July board meeting of Minnesota Housing Finance Agency addressed multiple programs, including several intended to reduce homeownership disparities between whites and communities of color. In addition, the meeting covered some staffing changes at the Agency.
Staffing updates at the Agency
Commissioner Tingerthal opened the meeting with some significant personnel news. After 20 years at the Agency, Assistant Commissioner for Policy and Community Development Tonja Orr will be leaving in September. At the same time, the Agency will gain the expertise of Kristine Zimba as the new coordinator for the Family Homeless Prevention and Assistance Program. She was previously the Housing and Support Services Director for the St. Paul YWCA. Also introduced was Karin Todd who came to the Agency from MHP to be a multifamily loan processor.
Addressing racial and ethnic disparities in homeownership
The Agency selected program providers for the Targeted Mortgage Opportunity Program and Homeownership Capacity Initiative. Together these programs provide intensive counseling and mortgage financing intended to assist households to prepare for and achieve successful homeownership. Both programs aim to reduce the homeownership disparity between white households and households of color or Hispanic ethnicity. To provide counseling, the Agency selected seven organizations with track records of working with households from many cultures and ethnicities to become successful homeowners.
The Agency will also provide up to $8 million in mortgage loans for households that complete the counseling program and have the ability to successfully make mortgage payments, but are not able to qualify for loans under existing mortgage programs. The lenders selected to originate these mortgages are Twin Cities Habitat for Humanity, SHOP Home Mortgage (GMHC/Dayton's Bluff NHS), and Build Wealth Minnesota.
To respond to increased program demand, the board approved transfer of $725,000 from the Strategic Priority Contingency Fund (a budget category within the Agency's 2014 Affordable Housing Plan) to three homeownership activities: $500,000 for Deferred Payment Loans; $150,000 to the Homeownership Capacity Initiative; and $75,000 to Home Improvement Loans.
Funding Aeon's "South Quarter IV" development
The board supported staff's recommendation to fund Aeon's mixed income 190 unit "South Quarter IV" development, a $36 million project proposed at the intersection of Franklin and Portland in South Minneapolis. The cost, at $298,000 per unit, came before the board as the cost was 41% higher than first estimated by the Agency's Predictive Cost Model. Staff cited that the higher costs are due to a commitment to energy efficiency, plus the fact that Aeon had to hold the property, located at a high-visibility intersection in Minneapolis' Phillips Neighborhood, for 10 years before development. Aeon will commit $4 million from its organizational capital campaign to fund the project. This extraordinary developer contribution means that the net funding needs will be within the parameters of the Predictive Cost Model, staff reported.
