MN Housing board update: Agency discusses tax credits, Trust Fund and more
During its July meeting, the board of the Minnesota Housing Finance Agency discussed the review of comments on its Affordable Housing Plan, increased demand for housing tax credits, the outcomes of the Agency’s Homeowner Capacity Initiative, and the use of Housing Trust Fund proceeds.
Affordable Housing Plan
In her introductory remarks, commissioner Mary Tingerthal asked that board members be prepared for a possible Program committee meeting in September to review comments on the Agency’s Affordable Housing Plan (AHP). The AHP is the Agency’s annual program spending plan. Tingerthal said that a draft of the plan will be available in mid-August. The public comment period on the draft plan will continue until August 26 and the board will be asked to adopt the final plan at its September 22 meeting.
Housing Tax Credits
A second topic in Tingerthal’s opening remarks concerned tax exempt bonding. On August 1, local governments will gain access to a portion of the tax exempt bonding available to the state through Minnesota Management and Budget (MMB). Tingerthal said that she believed that for the first time in many years the entire amount of the available bonding will be spoken for. This increased demand on the amount of tax exempt bonding allowed by the federal government requires that the Agency review its policies for awarding 4-percent housing tax credits; these credits are only available to multifamily development projects that also are financed with tax exempt bonds. Tingerthal said that over the next several months the Agency will continue discussions about potential new policies on awarding the 4-percent credits.
Homeowner Capacity Initiative
The board agreed to the staff’s recommendation on three uses of funding for the third year of the Agency’s homeowner capacity initiative. This pilot program is intended to help underserved households understand whether homeownership is right for them and what they can do to prepare themselves for successful home ownership. Staff said that, to date, 890 households have participated in the pilot, with 218 exiting. Of those who exited the program, about half have purchased homes. The majority of new funds ($600,630) will go to the programs of 13 counseling agencies. An incentive program available to counseling agencies will include $88,545 to help them meet their goals. The remaining $60,825 will be used to bring a NeighborWorks home counseling training program to Minnesota. Board member Craig Klausing asked whether the rate of those exiting the program and buying homes was any different than what is seen in a similar population not receiving the training. Staff responded that is one area that will be explored in the program analysis. Tingerthal said that the research will be extensive and help the Agency understand why participants did or did not purchase homes.
National Housing Trust Fund proceeds
Staff also gained board approval on the distribution plan for the Agency’s first use of National Housing Trust Fund (NHTF) proceeds. The Agency expects to receive its first $3 million installment from HUD in time to award them under the current RFP, with awards being made this October. Staff’s presentation responded to comments on the allocation plan submitted by the Institute on Metropolitan Opportunity (IMO). IMO suggested trust fund dollars be committed to projects in areas that are not impoverished. Staff, responding to the comment, stated that economic opportunity is an important consideration, but the Agency has additional priorities in awarding funding, and the Agency’s trust fund allocation plan reflects the variety of Agency funding priorities.
Responding to an additional IMO comment regarding integrating fair housing measures, staff said that the consolidated RFP application already includes language incorporating affirmative fair housing marketing regulations, and staff has made an explicit change to the allocation plan to include the requirement that housing providers receiving NHTF resources carry out an affirmative marketing program. The Agency has also recently released tenant selection plan guidance to the owners and developers of Agency funded properties that stresses fair housing concerns and includes a focus on recent HUD guidance on criminal background screening.
Board member Klinzing said that, while the Trust Fund’s $3 million is not a lot of funding, it was still important for the board to have this conversation concerning where projects should be located. She added that the Agency is doing a good job of balancing resources among its many priorities and ensuring consistency with its mission.