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Multifamily Program Descriptions

Rental Production – New Construction and Rehabilitation

Low- and Moderate-Income Rental Program (LMIR)
LMIR provides interest-bearing, amortizing, first mortgages available for the refinance, acquisition, rehabilitation or new construction/conversion of rental apartment buildings that house low- and moderate-income Minnesotans. Flexible Financing for Capital Costs, offered only in conjunction with LMIR, provides additional deferred assistance to support the production, stabilization, and maintenance of multifamily rental housing.
 
Flexible Financing for Capital Costs (FFCC)
FFCC funds deferred loans at no or low interest to support the production, stabilization, and maintenance of multifamily rental housing.  FFCC loans are available only in conjunction with LMIR loans for rental housing development.
 
Housing Tax Credits (HTC)
HTC is a federal income tax credit to owners and investors in the construction or acquisition with substantial rehabilitation of eligible rental housing. Housing must meet income and rent restrictions for a minimum of 30 years. Tax credits are awarded in a competitive allocation process held each year concurrently with the Minnesota Housing Consolidated Request for Proposals. The amount of tax credits available is based upon the state population and a per capita amount that increases each year with the cost of living. The syndication proceeds are the amount of private equity invested in developments as a result of federal housing tax credits awarded.
 
Housing Tax Credits-Section 1602/Exchange
Under this program, tax credit agencies such as Minnesota Housing could exchange a portion of their Housing Tax Credits for cash grants from the U.S. Treasury to replace tax credit equity for developments unable to find a syndicator or provide gap funding (in the form of a no-interest forgivable loan). Funding is no longer available.
 
Affordable Rental Investment Fund (ARIF) and Affordable Rental Investment Fund-Preservation (PARIF)
PARIF is a statewide program that provides deferred loans at below-market interest rates to help cover the costs of preserving permanent affordable rental housing with long-term, project-based federal subsidies that are in jeopardy of being lost.  Program funds may also be used to preserve supportive housing developments.  The program provides funds to help with the costs of acquisition, rehabilitation and debt restructuring, as well as equity take-out deferred loans.  Funding for rental housing developments is now funded through Challenge rather than ARIF.
 
HOME Affordable Rental Preservation Program (HOME HARP)
HOME HARP provides deferred loans to assist in the preservation of permanent affordable rental housing that may have long-term, project-based federal subsidies or supportive housing units.  Funds may be used for acquisition, rehabilitation, and debt restructuring.
 
Ending Long-Term Homelessness Initiative Fund (ELHIF)           
ELHIF is assistance for permanent supportive housing for persons experiencing long-term homelessness and can be utilized for capital financing, operating subsidies, rental assistance, and non-bondable development costs in general obligation bond-funded supportive housing projects.
 
Housing Trust Fund (HTF)
Currently used primarily for rent assistance and operating expenses, HTF has been available for capital funding for the acquisition, construction, and rehabilitation of affordable and/or permanent supportive housing.
 
Publicly Owned Housing Program
This program provides deferred loans at no interest to eligible public entities to preserve or rehabilitate publicly owned housing.  Funds are from proceeds of state general obligation bonds and may be used only for eligible capital costs.
 
HOME Rental Rehabilitation Program
Under this federally funded program, for which resources no longer are available, deferred loans could be used to rehabilitate privately owned rental property to support affordable, decent, safe, and energy efficient housing for lower-income families. 
 
Rental Rehabilitation Loan Program
The Rental Rehabilitation Loan Program provides fully amortizing property improvement loans for up to 15 years to residential rental
property owners. Financing is available statewide.
 
Rental Rehabilitation Deferred Loan
This is a Pilot Program which provides zero interest deferred loans of up to $300,000 for property improvements to help owners of aging properties in Greater Minnesota stabilize small to medium size rental properties. Loans are available to through a separate Request for Proposals or through a network of local administrators.

Rental Assistance

Section 8
The Section 8 program was enacted in 1974 to provide decent, safe, and sanitary affordable housing for households with a range of incomes.  Eligible tenants pay no more than 30 percent of their income for rent; HUD pays the difference between tenant payments and the fair market rent of the housing.  For informational purposes, data on Section 8 Performance Based Contract Administration units (Minnesota Housing administers under a contract with HUD), and Minnesota Housing-financed Section 8 units are reported separately.
 
Section 236 (Minnesota Housing-financed)
The Section 236 Program, which was used to fund low-income housing in the late 1960s and early 1970s, was predominately a program between the federal government, private lenders, and private for-profit and nonprofit developers.  Under Section 236 the federal government subsidized the interest rate on the mortgage from the then current market rate to a rate of one percent in order to reduce rents and make housing more affordable. Section 236 was a predecessor to the Section 8 program.

 

Non-Capital Resources to Prevent and End Long-Term Homelessness

Housing Trust Fund (HTF)
Rental assistance and operating subsidies currently may be provided for unique costs associated with operating a low-income or supportive housing development or for revenue shortfall to help reduce the difference between the costs of operating a low-income housing development and the rents that the tenants can afford to pay. At least 75 percent of funds in HTF must be used for the benefit of persons and families whose income, at the time of initial occupancy, does not exceed 30 percent of the median family income for the Minneapolis/Saint Paul metropolitan area.
 
Ending Long-Term Homelessness Initiative Fund (ELHIF)           
ELHIF is assistance for permanent supportive housing for persons experiencing long-term homelessness and can be utilized for capital financing, operating subsidies, rental assistance, and non-bondable development costs in general obligation bond-funded supportive housing projects.
 
Bridges  
Bridges operates in selected counties providing grants for temporary rental assistance payments and security deposits paid directly to landlords.  Assistance is provided on behalf of participants with serious and persistent mental illness who are on a waiting list for a permanent rent subsidy, typically a Section 8 Housing Choice Voucher.   The program is administered by local housing organizations; referral to the program must be made by a mental health professional.
 
Family Homeless Prevention and Assistance Program (FHPAP)
FHPAP provides grants to encourage and support innovations at the county, region, or local level in redesigning the existing homelessness support system or in establishing a comprehensive system.  Funds are used for a broad range of purposes aimed at preventing homelessness, shortening the length of stay in emergency shelters or length of homelessness, and assisting individuals and families experiencing homelessness to secure transitional or permanent affordable housing.
 
Housing Opportunities for Persons with AIDS (HOPWA)
This federally funded program provides grants to nonprofit agencies to meet the housing needs of persons with Acquired Immune Deficiency Syndrome (AIDS), HIV-positive status, or related diseases, and their families.  Grants may fund both housing assistance and services.  The City of Minneapolis receives and administers a direct grant for the 11-county Minneapolis/Saint Paul metropolitan area, and the State of Minnesota receives a direct award of funds for the portion of the state not covered by the City of Minneapolis grant.
 

Portfolio Management

Asset Management
The Asset Management and Financing Adjustment Factor (FAF) and Financing Adjustment (FA) accounts are used to make interest and non-interest bearing amortizing and deferred loans as well as rent subsidy grants.  Minnesota Housing-financed first mortgage developments may be eligible for funding if reserves are inadequate to fund capital improvements.  Loans typically are made for repairs and maintenance to protect the Agency’s assets and ensure the development is decent, safe, and sanitary.  FAF/FA savings are the result of an agreement between the U.S. Department of Housing and Urban Development (HUD) and Minnesota Housing to share in the savings resulting from refunding high interest rate bonds originally issued in 1980 and 1982 to finance Section 8 developments.
 

Multiple Use Resources               

Economic Development and Housing/Challenge Fund
The Challenge Fund provides grants or loans for a variety of purposes including: construction, acquisition, rehabilitation, or permanent financing; interest rate reduction; refinancing and gap financing. Funds are to support economic development or job creation activities within a community or region by meeting locally identified housing needs and may be used for either rental or owner-occupied housing.
 
My Home Source
My Home Source is a line of credit funded by the Economic Development and Housing Challenge Fund to enable a developer to acquire foreclosed homes for rehab and resale. (Time limited.)
 
Community Recovery-Bridge to Success
Funded through the Economic Developments and Housing Challenge Fund appropriation, this is an alternative financing tool (contract-for-deed) designed to reduce the for-sale inventory in neighborhoods stressed by the foreclosure crisis.  This program was developed and refined with the cooperation of the Greater Metropolitan Housing Corporation and Dayton’s Bluff Neighborhood Housing Services.
 
Community Revitalization Program (CRV)
CRV is the umbrella under which Minnesota Housing currently delivers the Challenge Fund and two interim financing programs for homeownership and rehabilitation of owner-occupied homes.
 
Technical Assistance and Operating Support
Under the Technical Assistance and Operating Support Program, grants are available to build or maintain the capacity of local entities  to promote affordable housing.  Funds may be used for a variety of purposes including staff training and organizational support funded with state appropriations and Agency resources.
 

Other   

Neighborhood Stabilization Program (NSP)
Federal NSP funds provide assistance to local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonments and blight. Minnesota Housing has awarded funds to nine agencies in the Twin Cities and 12 in Greater Minnesota. (Time limited.)
 
Disaster Recovery
State appropriated funding may be made available for repair or replacement of renter or owner-occupied housing damaged by natural disasters such as flood or tornado.